Vampire Lenders

The Sun-Herald columnist, Sam de Brito, in his article entitled ‘Pay day drips cash for vampire lenders’, says there is a new wave of micro-lending companies offering small, short-term loans to cash-strapped Aussies, many under the age of 30, the majority living payday to payday.

As far as those loans are concerned, the maximum charge allowed by law is a 20 percent establishment fee plus four percent interest per month, which can translate to 93 percent annually if compounded monthly. Payday lenders include Cash Converters, Loan Ranger, Payday 24/7, Nimble and Cash Train.

Predatory lenders and ‘interest free’ loans from retailers, all target the people with the least to give, offering the false promise that ‘stuff’ outside them will make them feel better about what is going on inside them. However, true long-lasting happiness cannot be obtained by simply buying things. One of the leading philosophers of the 20^th Century, the Indian Master of Happiness, Paramhansa Yogananda, once said: Many people are unhappy because they are looking for happiness in material things. In fact, they are looking for happiness everywhere, except  within themselves. To chase happiness outside of yourself is like searching for the pot of gold at the end of the rainbow – it is simply not there.

 It is also hard to be happy if you have no money in the bank, your short-term loans are maxed out and you’re living from pay to pay. The David Copperfield character Mr. Micawber said: Annual income 20 pounds, annual expenditure 19 pounds 19 shillings and six pence, result happiness. Annual income 20 pounds, annual expenditure 20 pounds and six pence, result misery. Regardless of how much, or how little you earn, make a promise to yourself to save at least 10 percent of your income. Initially, use this money to pay off what Nimble refers to as ‘smart little loans’ and then your other consumer debts. When you are debt-free, put yourself on the path to prosperity by investing those savings. I realise that it may be a slow uphill battle, but believe me the results will be worth the effort.