SAN ANTONIO – Borrowers who need a few hundred bucks quickly are more frequently relying on so-called "payday loans" at one of the many small loan companies across the area, but these loans can also be expensive.
Now, rules are in effect that should allow borrowers to have more information about what they are getting into.
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On Southwest Military Drive in San Antonio, there are loan companies on just about every corner. People go to those places to borrow a few hundred to a few thousand dollars for everything from bills to car repairs to other purchases.
Joshua Jones said he took out a $600 loan years ago and paid it back in about two months. Jones said he is still getting harassing phone calls from another company mistakenly trying to collect the money.
He warns borrowers to stay away from these types of businesses. "I don't want people to go through the same stuff I went through," Jones said.
Jones said the harassment was on top of the high interest rates and fees. His advice? "Honestly, I wouldn't do it," Jones said. "Not at all. Would not even do it. I tell folks it's a scam."
Jones hopes two new laws that took effect at the beginning of the year will help protect people using payday loan services.
State Rep. Joe Farias of San Antonio helped pass those laws. "You take out a $300 note and you end up paying $860 back," Farias said. "That is uncalled for. That is as close as you can get to highway robbery."
One of the laws now in effect requires companies to clearly state interest rates and fees to customers. The other requires them to be licensed by the state.
The Better Business Bureau worked to get those bills passed. Spokeswoman Kristi Pena said her hope is that consumers will be better protected.
"This is very good," Pena said. "The problem that we're having is this interest rate goes up to 800%. And people don't understand that. It is just outrageous."
Now at least customers will know what rates and fees they are paying.
Local leaders are also working to get a city ordinance passed that will reinforce the new state restrictions on the payday loan industry.