Tuesday, June 28, 2016
Blog

Loan churning dramatically increases payday lending fees without providing borrowers with access to new credit. We estimate that loan churn in states with no restrictions on payday lending costs borrowers at least $2.6 billion...

Payday loans high-cost small loans averaging $350 that usually must be repaid in a single payment after two weeks—are designed to create a long-term debt trap. Whether they receive the loans online, in storefronts,...

Internet Payday Loan Website Privacy Policies Surveyed the privacy policies posted by these companies. Except for one site, all of the lenders included a privacy policy that was readily accessible on their website. While the...

Payday Loans are a Debt Trap A key criticism of payday lending is the debt trap result of loans that are very expensive, have short repayment periods, and are secured by lender access to bank...

Lenders Use Borrowers to Market Loans Payday loan websites use a variety of marketing tools to bring in loan applications. Several sites pay commissions for referrals via affiliate marketing, using companies such as Commission Junction...

Online Lenders and State Licensing Surveyed online payday lenders with brick-and-mortar stores that have state licenses typically post their licenses online and provide loan terms and cost for state-specific pages on their websites. These include...

How much does it cost for an online cash advance? The fee for a check advance is 25% of the amount borrowed, so for a $100 loan, the fee is $25, or $125 total due. In...

Internet Payday Loan Size and Term Loan size varies by lender and by whether the online lender complies with state payday loan limits.The surveyed sites offered loans from $100 to as high as $1,500 with...

Qualifications to Borrow from an Online Payday Lender Most surveyed sites listed basic requirements for borrowers to qualify for loans. For example, Mycashnow.com requires borrowers to be 18 years old, to have a checking account...

Payday loans are extremely expensive small loans secured by direct access to the borrower’s bank account, either through a post-dated check or other authorization to withdraw funds from the account on the borrower’s next...

Conditional on satisfactory job performance, reenlistment is a voluntary decision made by active enlisted members of the military at the end of their term.Separation (failure to reenlist) rates are critical because lateral entry is...

State laws are an important determinant of access to payday loans. Many states have laws that effectively prohibit payday lending by imposing binding interest rate caps on payday loans or consumer loans more generally....

The closest substitute for a payday loan is arguably overdraft protection on a bank account (Stegman 2007; Morgan and Strain 2008).The other expensive loan products labeled “predatory” by the Pentagon and consumer advocates require...

payday loan access has adverse effects on job performance and readiness. Access significantly increases the likelihood that an airman is ineligible to reenlist by 1.1 percentage points (i.e., by 3.9%). We find a comparable...

Does borrowing at 400% APR do more harm than good? The Pentagon asserts that payday loans harm military readiness and successfully lobbied for a binding 36% APR cap on loans to military members and their...