Policy Quick: Installment Loan Act Would Expand Predatory Lending in Louisiana

The Louisiana Installment Loan Act ( home Bill 501 / Senate Bill 365 ) would expand the loan that is payday in Louisiana by enabling payday loan providers and vehicle name loan providers to provide longer-term “installment loans.” Installment loans act like payday that is high-interest, but enable borrowers to obtain bigger loans for longer amounts of time. The installment loans wouldn’t normally change current pay day loans, but could be a completely brand new product with a high charges for people that create a much better danger that borrowers gets caught within 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 times. The bills that are proposed additionally enable loans from $500 to $1,500, with payment durations enduring from half a year to at least one 12 months. The middle for Responsible Lending calculates that a $500 loan, repayable over half a year, would carry a 245 % percentage that is annual (APR), whenever all charges are included. For the $1,000 loan due in one year, payday loan providers would gather a lot more than double just just exactly what they provide. (بیشتر…)