I was absolutely astonished to learn that one of the primary uses for payday loans today is to pay medical bills. I have a hard time coming up with a worse way to pay for a medical procedure than to use a payday loan. I know everyone has seen them in (usually) unsavory strip malls and shopping plazas, but after learning about why people are getting these loans I felt compelled to start typing. This blog entry has no overarching plan to it. I sincerely just sat down and started typing. The only thing I have to say is when it comes to healthcare financing, "Do. Literally. Anything. Else." Advocates of payday loans or...you know what, let's call them what they really are - short term, incredibly high interest, balloon loans...where was I...oh yeah, advocates point to these loans as a consumer's "best option." Its not. It is not the best option. It's convenient. The first time. But when you have to do a second payday loan to cover a previous payday loan. You're stuck.
It's like casinos in Vegas. They are putting up more 4,000 room hotels every year because Vegas is winning. Well, in 2005 payday storefronts outnumbered McDonald's and Starbucks locations COMBINED. COMBINED. COMBINED. Sorry, I got stuck there for a moment. In 2011 payday lenders extended $40 BILLION in payday loans. You know what? People see billion and it doesn't look that much different than "million," so I'm going to write it out. In 2011 payday lenders extended $40,000,000,000 in payday loans. Put that together with an APR of 300-500%. Nope. I didn't miss a decimal point. But don't take my word for it, read the report from this little group called the Federal Reserve Board.
I'd normally say, "I digress," but this whole entry is one big digression. So I'll just say this, if you work at a credit union, bank, medical office, hospital, clinic or surgery center, you need to help me. We need Patient Lending in place in more financial institutions so that consumers who have unexpected medical procedures have something else to evaluate BEFORE they decide that a payday loan is the "best option." We built our platform so banks and healthcare providers can work together to provide a better option for their patients. Patient Lending is a monumentally better option for someone who parks their car in front of a payday loans storefront and considers walking in.
Boy, I might need a ladder to get down off this soapbox.
Yes, we sell our platform to banks and we profit off Patient Loans. So yes, this post is somewhat self serving, but in our model, no one's life is ruined.