Analysis of States’ APR Caps for a $10,000 five-year Installment Loan Everything that is wrong with a high-cost loan is only made worse when the loan is larger and longer. Even when the interest rate is lower than for a short-term payday loan, a larger, longer high-cost loan can be a deeper, longer debt trap.…
Read More about Predatory Installment Lending in the States: A Larger and Longer Debt Trap? (2018)
When the National Consumer Law Center published the report Installment Loans: Will States Protect borrowers From a New Wave of Predatory Lending? in July 2015, predatory installment lenders were moving into the states, seeking statutory authority to make consumer installment loans at sky-high interest rates. The report analyzed which states allowed high-cost installment lending and…
OVERVIEW In a responsible loan market, the lenders’ profits are closely aligned to the successful repayment of the credit. Yet high-rate installment lending can lead to asymmetrical incentives:As long as the borrower pays long enough before defaulting, a high-rate installment loan will be profitable. If the borrower makes even half the payments on a longer term high-rate installment…
FOR IMMEDIATE RELEASE: JULY 21, 2016 || Contacts: Lauren Saunders ([email protected] or 202.595.7845) Access full report, charts, and additional resources: http://bit.ly/2a8I9T5 (WASHINGTON) As the Consumer Financial Protection Bureau prepares to tighten rules for payday loans, lenders are moving into dangerous high-rate installment loans, according to a new report from the National Consumer Law Center (NCLC). Misaligned Incentives: Why…
Read More about NCLC Report: Why High-Rate Installment Lenders Want Borrowers Who Will Default
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