Mark has lived and worked in Chicago his entire life. For more than 42 years, he supported his family by working for the U.S. Postal Service. Since retiring, he spends time with his four children and 11 grandchildren and serves as an Ordained Senior Elder at his church.
Now that Mark is retired, he lives on a fixed income. A couple of years ago, Mark had a financial emergency. Rather than miss a rent payment for the first time in his life, he turned to an auto title loan to try to make ends meet. His $1,000 loan had an annual interest rate of 304.17 percent. Given the high interest rate, Mark worked to pay off the loan as quickly as possible.
Wanting to avoid relying on such a costly loan in the future, Mark began working hard to build up his savings. Unfortunately, before he could meet his savings goal, his car broke down. To stay afloat, he took out a second auto title loan for $1,500. When he finishes paying off this loan, he will have paid $381.90 per month for 24 months – an astounding total of $9,165.60 – on an original loan of just $1500.
Mark’s total price tag for taking out $2,500 in title loans to cover common financial emergencies will exceed $15,000. Instead of making ends meet, Mark is caught in a cycle of debt.
This story is part of No Right Turn: Illinois’ Auto Title Loan Industry and its Impact on Consumers, a report we released with Woodstock Institute recently. Download the report to learn more about auto title lending in Illinois, and how it affects people like Mark.
You can use these tweets to spread the word:
$2500 in title loans can cost more than $15000. http://bit.ly/autotitleIL #StoptheDebtTrap @ILAssetBuilding @WoodstockInst
Mark’s Story: 2 auto title loans, 304% APR, 2 year loan terms via new report:http://bit.ly/autotitleIL @ILAssetBuilding @WoodstockInst