Sandra Miller , Clarkston, WA

“I took out my first payday loan in June 2005 amidst mounting medical bills. I had been though surgery three times on my back. After the last operation, I developed a staph infection and was forced to take additional time off of work to recover. Because I live paycheck-to-paycheck, I couldn’t actually afford to take extra time away from work, but I had no choice. Without my regular paycheck, I struggled to pay my rent and provide for my two children. One of my co-workers suggested that I take out a payday loan to help pay my rent and avoid eviction.

My first loan was for $300 and the lender gave me two weeks to repay it. At first this seemed manageable, but when my paycheck arrived, I realized that I couldn’t pay back the $300 plus interest and still pay my bills. I was told that I could just pay the interest and roll over the debt for another two weeks, so this is what I did. Unfortunately I was never able to make enough money to repay the entire debt so I continued to pay the interest and roll over the debts. Still trying to keep up with my other bills while paying the interest on the payday loans, I began going to other payday lenders. In the end, I owed $3,700 to seven payday lenders in both Washington and Idaho. I am behind on my rent, my car is falling apart, and I am struggling to provide for my children, ages 11 and 13. With help, I have been able to slowly pay off all but one of my loans and I am slowly working on paying off my final loan.

When I took out my first loan, I had no idea what kind of trap I would get myself into. I did not understand that, unlike bank loans, I would not be able to make payments toward the principle balance on my payday loan. There were no payment plans available to me; my only choices were to pay back the loan in full or pay the interest and roll over the debt. As someone who lives paycheck-to paycheck, I understand that people with low-incomes cannot afford unexpected expenses and as a result may need to use a payday lender. But, people using payday loans deserve the same protections as those using bank loans. Putting a limit on the amount of interest a lender can charge and offering repayment plans would give loan consumers a fair chance at paying off their debt rather than getting trapped in a cycle of debt.

I chose to tell my story to Poverty Action in hopes that others would understand how badly the payday lending industry needs reform. I want others to learn from my experience and to join in the fight to prevent others from getting trapped in a cycle of debt.”