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Description
Payday lending undermines the economic security of working individuals and families. Many low-income workers, lacking the credit history and collateral needed to obtain a traditional loan but still in need of quick cash, turn to payday lenders who require only a bank account.
The borrower gives a postdated personal check to the lender in return for cash. In most cases, however, borrowers are unable to fully repay their debt, and they consequently incur repeated bounced check fees. The rolled-over long-term loans have annual percentage rates (APRs) of interest ranging from 391 to 443 percent on average. These exorbitant fees and APRs trap needy consumers in endless cycles of debt. Because borrowers are unable to pay off an initial loan, 91 percent of all loans go to borrowers with at least 5... |
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