Installment Loan Act Would Expand Predatory Lending in Louisiana

Installment Loan Act Would Expand Predatory Lending in Louisiana

The Louisiana Installment Loan Act would expand the pay day loan industry in Louisiana by enabling payday loan providers and automobile title loan providers to provide longer-term “installment loans.” Installment loans are similar to high-interest payday loans, but allow borrowers to get bigger loans for extended amounts of time. The installment loans will never change current pay day loans, but could be a completely brand brand new item with a high prices for people that create a much greater danger that borrowers can get caught when you look at the predatory lending financial obligation trap.

Payday loan providers in Louisiana currently make high-interest loans of $50 to $350 that really must be paid back within 60 days. The bills that are proposed also enable loans from $500 to $1,500, with repayment durations enduring from six months to 1 year. The middle for Responsible Lending determines that a $500 loan, repayable over half a year, would carry a 245 % percentage that is annual (APR), whenever all costs are included. For the $1,000 loan due in year, payday lenders would gather a lot more than double exactly just what they provide. Continue reading “Installment Loan Act Would Expand Predatory Lending in Louisiana”