Moneywise On Oneplace.com

Howard Dayton is the founder of Compass— Finances God’s Way and the former host of this program.  0:55 - WHAT'S THE FIRST LOAN TYPE WE SHOULD AVOID?Finance Company loans: High interest rates, large fees, and closing costs.Important to differentiate between interest rate and the APR, as the latter includes additional costs. 1:24 - AND THE SECOND?Payday loans:Viewed as "legalized robbery."Typically have an APR of 390%.Creates a cycle of borrowing due to high interest rates, with borrowers often giving away their entire paycheck to cover the loan. 2:21 - WHAT'S THE THIRD LOAN TYPE?Pawnshop loans:Short-term loans based on an item's value which is lost if the loan isn't repaid on time.Interest rates range from 5-25% per month.Many borrowers never reclaim their pawned items. 3:21 - AND THE FOURTH?Auto title loans:30-day loans using car titles as collateral.Risk of car repossession if payments aren't made on time.Referred to as "legalized auto theft" since you lose both the car and its equity regardless of loan size