"I'm In A Hole With Payday Loans"

Summary

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Episode Overview

Podcast: The Ramsey Show Highlights
Episode: "I'm In A Hole With Payday Loans"
Date: December 20, 2025

This short, impactful episode centers on a caller—Alex—who finds himself overwhelmed by payday loan debt after a job loss. With high-interest loans totaling $3,500 at a staggering 500% APR, Alex describes the financial and emotional burden of living paycheck to paycheck, desperately working gig jobs to survive. Dave Ramsey and his co-hosts offer urgent, practical advice—not only for Alex, but for anyone teetering on the edge of financial disaster—emphasizing the importance of extra income, prioritizing basic needs, and never getting trapped by predatory payday lenders again.

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Key Discussion Points & Expert Advice

Alex’s Payday Loan Crisis

• Background:

  • Alex had to rely on payday loans after losing his job due to his low credit score, making him unable to secure more traditional help for rent and basic expenses.
    • “I've gotten myself into a pretty big hole with payday loans totaling about $3,500. You know the APRs on them are all 500% or so.” (Caller, 00:06)

• Current Situation:

  • He’s earning about $800 a week driving for Lyft, but nearly every dollar goes to loan payments and essentials, perpetuating a stressful cycle.
    • "Basically all of my money just goes to those payday loans and basic living expenses. And I just really want to get out of this cycle." (Caller, 00:46)

Practical Steps & Immediate Advice

• Job Income and Short-Term Solutions:

  • Alex is about to start a better-paying job but struggles to stay afloat in the interim.
    • "What’s the new job pay?"
    • "It’ll be 63, plus some bonuses, so probably about 70." (00:51–01:00)

• Increasing Earnings:

  • Dave and co-hosts brainstorm additional side gigs and encourage pursuing higher-paying, short-term work (such as UPS, FedEx, or holiday help jobs) instead of just Lyft.
    • "Do you have a lawnmower? Can you go cut grasses and trim hedges and rake leaves and detail cars?" (Co-host, 01:19)
    • "I'm just thinking FedEx. You can throw boxes. FedEx and UPS are hiring right now, and they're paying more than you're making with Lyft." (Host, 01:57)

• Budgeting & Bill Prioritization:

  • Dave outlines the order of priorities for someone in an emergency financial situation:
    • “The first thing you do is you buy food. The second thing you buy is you buy electricity. The third thing you buy is rent. The fourth thing you do is pay a car payment. Only after all of your living expenses are covered do you pay anything on a payday loan.” (Dave Ramsey, 02:42)

Breaking Free from Payday Loans

• Never Use Payday Loans Again:

  • Dave is emphatic about payday lender dangers:
    • “And don’t you ever walk in those places again and borrow money the rest of your freaking life. Remember the pain of this and remember the stupidity of this and the ridiculous trap that you voluntarily stepped into so you never do it again.” (Dave Ramsey, 03:34)

• Shutting Down Lender Access:

  • The team supports Alex’s idea of revoking autopay authorization or even changing banks to stop giving payday lenders access to his money while making a clear plan to pay off debt.
    • "I was thinking about just revoking my bank authorization for them so they can't charge me anymore..."
    • "That's fine. Just stop it. Or change your bank account or close your bank account. I don't care. But the point is, you're going to have to pay them the $3,500..." (04:05–04:16)

Learning the Tough Lesson

• Personal Growth Through Pain:

  • Dave shares that these hard lessons—like stepping "in a bear trap"—lead to lasting change and a better life if you choose not to repeat them.
    • “Yeah, when I was that, Alex, I did that, and I won't ever do that one again. And I got a lot of those in my life, Alex. A lot of stuff that I used to do that I don't do anymore, and it's caused me to have money and it's caused me to have a better life and a better walk with Jesus and everything else…” (Dave Ramsey, 04:41)

• Teaching the Next Generation:

  • “Teach your children, teach your grandchildren. Teach everyone's children to stay away from those scumburgers. Those, they are screwing people.” (Dave Ramsey, 03:55)

The Deeper Issue: Living on the Edge

• No Margin Leads to Disaster:

  • The co-hosts reflect on Alex's lack of financial margin, explaining how living paycheck to paycheck leaves people vulnerable to financial catastrophe.
    • “He had been on the edge before, before, and he had no margin. And all it took was one little flick and then all the dominoes fell down.” (Co-host, 05:52)

• Advice for All Listeners:

  • “Somebody listening is on the edge.” (Co-host, 06:08)
  • Dave warns that layoffs come suddenly—and only emergency funds and the absence of debt can provide real security.
    • “You need to better wise up and buckle down right now, otherwise you’re going to get laid off... They come in and tell you, seven minutes from now you’re leaving the building.” (Dave Ramsey, 06:11)
  • “You got $30,000 in the bank and no payments, and they lay you off, you look at them go, ‘What’s the severance?’ You got $30,000 in credit card debt and no money, and they lay you off. You go, ‘Oh crap, I am heading down to the payday loan place.’” (Dave Ramsey, 06:30)

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Notable Quotes & Memorable Moments

• On Priorities:

  • “The first thing you do is you buy food... Only after all of your living expenses are covered do you pay anything on a payday loan.” (Dave Ramsey, 02:42)

• On Payday Loans:

  • “Don’t you ever walk in those places again and borrow money the rest of your freaking life…” (Dave Ramsey, 03:34)
  • “Teach your children...stay away from those scumburgers. They are screwing people.” (Dave Ramsey, 03:55)

• On Learning from Mistakes:

  • “You just have to be one of those guys that goes, yeah, when I was that, Alex, I did that, and I won't ever do that one again... it changed everything. And that's where you are.” (Dave Ramsey, 04:41)

• On Living Without Margin:

  • “He had no margin. And all it took was one little flick and then all the dominoes fell down.” (Co-host, 05:52)
  • “You need to better wise up and buckle down right now... otherwise you’re going to get laid off... They come in and tell you, seven minutes from now you’re leaving the building.” (Dave Ramsey, 06:11)

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Timestamps for Key Segments

• 00:06–00:46: Alex’s backstory and current payday loan debt crisis
• 01:00–01:57: Discussion of job options and side hustles
• 02:42: Dave’s strict priority order for what bills to pay
• 03:34: Dave’s forceful warning about payday lenders
• 04:05–04:16: Advice on stopping payday lender direct withdrawals
• 04:41: Dave’s personal story of financial transformation
• 05:52–06:30: The co-hosts’ warning about the dangers of living with no financial margin
• 06:30–06:58: Final thoughts on building security through savings and no debt

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Conclusion: Takeaways for Listeners

This episode powerfully illustrates the debt trap of payday loans and the struggle to regain financial stability. Dave and his co-hosts emphasize that escaping this cycle requires brutally clear priorities, relentless work ethic, and a vow never to return to high-interest lenders. Most importantly, the episode speaks to everyone living with no margin—that financial emergencies come quickly and preparing now is essential to avoid repeating Alex’s painful story.

Transcript

[A]

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[B]

I've gotten myself into a pretty big hole with payday loans totaling about 3,500. You know the APRs on them are all 500% or so.

[A]

Yep.

[B]

Yeah, I took them out because I got laid off in August and I didn't have a good enough credit score to get a loan to get me help with rent and everything. And I'm starting a new job in about three weeks. And in the meantime, I've been working Lyft and making about 800 or so a week. And basically all of my money just goes to those payday loans and basic living expenses. And I just really want to get out of this cycle.

[A]

What's the new job Pay?

[B]

It'll be 63, plus some bonuses, so probably about 70.

[C]

That's good.

[A]

What else can you do for the next three weeks other than lift?

[B]

That's. That's the thing. I don't know. I'm already doing 10 hour days. Five, six days a week.

[A]

So you're making a dollar an hour. What else can you do?

[C]

Do you have a lawnmower? Can you go cut grasses and trim hedges and rake leaves and detail cars? Can you do something like that where you can set a higher rate?

[B]

Yeah. So I've been looking on Craigslist and Facebook for just general odd jobs, and the only thing that I've been able to get was I helped this guy move. Move all this furniture and stuff for like 200 bucks. You know, it's not really the best area, but that's something that I would be qualified for.

[C]

What about. I'm just. I'm spitballing with you. What about, it's holidays. What about, like, hanging up lights? People need help hanging up lights. What about something like that?

[A]

I'm just thinking FedEx. You can throw boxes. FedEx and UPS are hiring right now, and they're. And they're paying more than you're making with Lyft because you're making 800 coming in, but you got gas and wear and tear on the car coming out of that.

[B]

Yeah, yeah.

[A]

If you're driving that car 10 hours a day, you're not making any money.

[B]

Yeah, I thought about going and just getting that simple. Being a server or bartender or working at UPS or FedEx. It's. I just don't want to go through that whole process and then just leave in two weeks.

[A]

No, keep it. Keep it. Your new job doesn't work on the weekends.

[B]

Yeah.

[A]

Work Saturday and Sunday.

[C]

Mm.

[A]

Yeah.

[B]

I could do that.

[A]

Yeah, you're gonna need to and clean this mess up. In the meantime, the first thing you do is you buy food. The second thing you buy is you buy electricity. The third thing you buy is rent. The fourth thing you do is pay a car payment. Only after all of your living expenses are covered do you pay anything on a payday loan. And don't you ever walk in those places again and borrow money the rest of your freaking life.

[D]

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[A]

And don't you ever walk in those places again and borrow money the rest of your freaking life. Remember the pain of this and remember the stupidity of this and the ridiculous trap that you voluntarily stepped into so you never do it again. Okay?

[B]

Yeah. Yeah. I don't ever want to pay 500%.

[A]

Teach your children, Teach your grandchildren. Teach everyone's children to stay away from those scumburgers. Those, they are screwing people.

[B]

Yeah. The other thing was, I was thinking about just revoking my bank authorization for them so they can't charge me anymore until I can.

[C]

Yes.

[B]

Get out of it.

[C]

Yes.

[A]

That's fine. Yeah, that's fine. But you could stop it. That's fine. Just stop it. Or change your bank account or close your bank account. I don't care. But the point is, you're going to have to pay them the 3500, and you're going to have to pay them a bunch of stupid interest at some point. And the more money you make, the faster that's going to happen. And then never, under any circumstances, go in there again. Okay?

[B]

Yeah, I know. I, I, I knew it was stupid, too.

[A]

Yeah. I mean, it's just you, you, you, you stepped in a bear trap, and guess what? It ripped your leg off. Oh, my gosh. This is ridiculous. I'm so sorry. Wow. It's such a trap, though. It's such a ripoff. But yeah, you just have to be one of those guys that goes, yeah, when I was that, Alex, I did that, and I won't ever do that one again. And I got A lot of those in my life, Alex. A lot of stuff that I used to do that I don't do anymore, and it's caused me to have money and it's caused me to have a better life and a better walk with Jesus and everything else, because I don't do the stuff I used to do the other version of Dave. Right? And so it changed everything. And that's where you are. That's who you're going to be. And you're on your way. You're going to clear this up. But the faster and the more you work, the faster you create income, and the more income you create over the next four months, the faster this thing goes away and becomes a memory of that dumb thing I did a long time ago back in. You'll tell your grandkids back In August of 25, I was over there, debate, you know, you could tell the grandkids story, right? And go, that did that stupid stuff. Son, you stay out of them places, you'll be that grandpa, right? And that's the grandpa you want to be, not the one that's still living broke.

[C]

The thing is though, what I keep thinking about when I hear his call is he had been on the edge before. Before, and he had no margin. No margin. And all it took was one little flick and then all the dominoes fell down.

[A]

Yep.

[C]

And somebody listening, it's on the edge.

[A]

Like there's a whole bunch of somebody's. And so you got, you need better wise up on buckle down right now, otherwise you're going to get laid off. Cause they don't come in and tell you, like seven months from now, we're gonna lay you off. They come in and tell you, seven minutes from now you're leaving the building.

[C]

And that's what they tell you. Yep.

[A]

Cause corporate America has one job and it's piss on their employees. And so that's their only job. And they're really good at it. So, you know, this is what happens. So now you've got to build a margin of an emergency fund and no debt payments. You got $30,000 in the bank and no payments, and they lay you off. You look at them go, what's the severance? You got $30,000 in credit card debt and no money, and they lay you off. You go, oh crap, I am heading down to the payday loan place.

[C]

You're at the mercy of whatever desperate thing you do next.

[A]

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