Earlier this week I received a letter from a company called Plain Green. Oh, yippy skippy, I thought. Another payday loan place trying to rip me off. As I looked at the materials they sent, I realized that this particular offer was an even bigger scam than most of the others I’ve received. I want to warn you guys in case you receive something similar to this - Always read the fine print, and understand that these loans are never a good idea.
The top of the letter boasted, “You’re prequalified! Get $1,200! Cash as soon as tomorrow!”
Reading further, I learned that Plain Green loans are supposed to be quick, convenient, and good for financial emergencies. Customers don’t have to wait for approval, own a home, or even have good credit. Plus you can save up to 40% on your first loan compared to a typical payday loan!
Even though I know better, by the time I finished reading, my brain was telling me that Plain Green is a good company who cares about its customers. Whoever writes their sales letters does an excellent job – I can see where people could convince themselves that they need a loan from Plain Green. All this stuff sounds great to a person who desperately needs money! Fortunately I am not that person.
Why Plain Green is a Scam
You guys know I’m not a fan of payday loans. That said, I’d like to talk about Plain Green’s claim that their loans are 40% cheaper than other payday loans, because it’s a load of crap. Their reasoning is that their APR is “only” 378.96%, while the average payday loan place charges 603.84%.
Okay, fine. Both types of loans have completely insane interest rates. But let’s ignore that for a minute and look at how these loans play out in real life. (Terms and APRs are current for my state as of the time of this writing.)
$250 Payday Loan from ChecknGo:
- Amount borrowed: $250
- APR: 470.43%
- Terms: One payment due 14 days after loan is taken out
- Total I would pay back: $295.11
$250 Loan from Plain Green:
- Amount borrowed: $250
- APR: 378.96%
- Terms: 12 biweekly payments of $45.29
- Total I would pay back: $543.48
Raise your hand if you’d rather borrow from Plain Green and spend nearly $250 more for the privilege of paying back your loan over 6 months instead of 2 weeks. Wow, really? No one? That’s what I thought.
Actually, even Plain Green doesn’t recommend that you borrow money from them:
Never mind the fact that this is buried in tiny letters at the bottom of their website under all the other stuff, like how taking out a loan from them will make your dreams come true. (Okay, not really, but it might as well say that.) They are basically telling you that it is cheaper to use a credit card or take out a personal loan than to borrow from Plain Green. And that’s coming from the same company sending out the letters.
Don’t Fall for Scams!
Look, I know it can be scary to need money and not have it. Believe me, I’ve been there. But if you don’t have $250 to your name, the LAST thing you need to do is hand some company nearly $550 in payments. Even using a credit card would be better than dealing with some scummy place like this.
Ideally we would all have adequate savings in place and we would never even consider borrowing from a place like Plain Green. I know that’s not always how it works, though. Maybe you totaled your car - you know, the one that’s worth far less than the amount left on your loan. Maybe you’re almost broke and trying to decide which bills to pay. Or maybe, like I used to, you just spend more money than you earn.
If you receive letters like the one I got from Plain Green, throw them away! Don’t even think about payday loans or any kind of high-interest loans as an option. Those places exist solely to rip off people who don’t have money saved for an emergency or a rainy day. Instead, take some time RIGHT NOW to figure out ways to start saving money. I don’t care how little you make or how many bills you have; you can save something starting today. The payday loan industry isn’t going to stop sending out sales letters, and emergencies aren’t going to quit popping up. The only behavior you can change is your own.