Payday loan companies feel the chill during the holidays

By  | 

RAPID CITY, S.D. ( KOTA TV ) - A little over a month ago on election day, South Dakota voters took a stand against payday loan companies.

Voters in November set the maximum finance charge at 36 percent; considerably down from the 100 percent or even 1,000 percent interest rates allowed in the past.

Trevor Johnson, the owner of Presidential Pawn & Clock Shop in Rapid City, feels a lot of the payday loan businesses locally are closing shop.

Johnson says if you are looking for quick money for the holidays, a pawn shop may be the place to turn.

"On a pawn loan there is no obligation to repay the loan," Johnson said. "They can simply not come back for the item. There are no hard feelings, we don't report to credit bureaus. Here someone can bring in an item of value and borrow against it and use that item as collateral and if they don't come back we don't mind."

With payday loans, the company will come after you if you do not repay the loan. Same with a title loan; they will look for your vehicle. In both cases, your credit is damaged.