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 cash advance industry in Louisiana by enabling payday lenders and automobile title loan providers to provide longer-term “installment loans.” Installment loans act like payday that is high-interest, but enable borrowers to get bigger loans for longer amounts of time. The installment loans will never change current payday advances, but could be a totally brand new product with high costs for people who create a much greater danger that borrowers can get caught when you look at the lending debt trap that is predatory.

Payday loan providers in Louisiana currently make high-interest loans of $50 to $350 that really must be paid back within 60 days. The proposed bills would additionally enable loans from $500 to $1,500, with payment durations lasting from a few months to 1 12 months. The middle for Responsible Lending determines that a $500 loan, repayable over 6 months, would carry a 245 % percentage that is annual (APR), whenever all costs are included. For the $1,000 loan due in one year, payday loan providers would gather a lot more than double just what they provide. Continue reading “Installment Loan Act Would Expand Predatory Lending in Louisiana”