Predatory Lending and a Better Alternative

Predatory lending is unfair, deceptive, and/or fraudulent. Frequently known as payday loans, they often charge interest over 100% and the borrower is at high risk for defaulting, or not paying back the loan. People use payday loans when they are in need of quick cash, typically to pay for necessities of life such as a utilities bill or rent. A 2008 study found that Texas payday borrowers are much more likely to file for Chapter 13 bankruptcy, because the loans often create a deeper financial crisis for borrowers already in desperate straits. In Texas, the average payday borrower pays $840 for a $300 loan and 59% of borrowers are women, many of them single women and single mothers. Although payday borrowers include all major ethnic groups, a disproportionately high percentage is African American. It is estimated that Texas borrows $3 billion annually from the payday and auto title industry. For fiscal year 2008 Cash America International reported $1 Billion in revenue. These companies are taking advantage of and profiting off people in a time of need. People who are susceptible to predatory lending are typically in a bad financial state, living paycheck to paycheck, with poor or no credit. Unfortunately, payday lenders in Texas have sued to block federal rules aimed to protect borrowers in a state that has failed to regulate the industry. If the state is unable to protect its citizens from predatory lending, there should at least be some type of alternative for people in need of a quick, small, personal loan. MiraLend seeks to be that alternative through peer-to-peer lending where members of the community can lend and borrow with one another directly. Lenders earn interest and the pleasure of helping someone in need, borrowers are offered fair interest rates and feasible payment plans so they are at lower risk of default. MiraLend believes that all members of the community deserve access to a fair and convenient loan. We are customer focused and community driven. Join us and together we can put an end to this vicious and vial cycle and help people take control of their financial situation.