Posts Tagged ‘banks’


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As Sarah Kendzior explains,

Payday loans are part of the new economic landscape, along with pawn shops, title loan outlets, and rent-to-own furniture stores that stand where retailers selling things once stood.

Poor Americans no longer live check to check: they live loan to loan, with no end in sight.

Fees for payday loans vary widely from state to state due to differing regulations. The average cost for a $300 five-month loan ranges from $172 in Colorado, where such loans are strictly regulated, to $701 in Texas, where lenders on average charge an annual percentage rate of 454 percent. Even on-line lenders, such as LendUp, charge exorbitant interest rates, of 145 percent.

But that’s just the start. As Stephen Stetson, a policy analyst with Alabama Arise, explains,

“By design these loans are intended for the borrower not to be able to repay them, they want the borrower to come back in and roll the loan over. They come back and pay another round of fees and buy themselves another 2 weeks, so time after time, loan after loan you aren’t getting additional money, just paying fees.”