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Seniors increasingly rely on payday loans, fall into cycles of debt

Payday loan business sign .
Payday loan business sign .
Helen Cobain/Flickr Creative Commons

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You may have come across an ad saying, "borrow the money you need now and pay it back on your next pay day."

For some people in a pinch, payday loans can be helpful but the challenge is that the consequences of taking out one of these loans could extend way past that next pay day.

A report from the California Department of Business Oversight reveals that the average annual rate for these loans is 372 percent.

In California, seniors, many of whom are on fixed incomes, make up the largest group of pay day loan borrowers.

To help us understand why so many older Californians are turning to high interest, short term lenders, Take Two's A Martinez spoke with Liana Molina, Director of Community Engagement at the California Reinvestment Coalition. And with Blanca Castro, Advocacy Director for AARP California

To listen to the full interview, click on the media player above.