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29Jan

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 loan providers and vehicle name loan providers to supply longer-term “installment loans.” Installment loans act like payday that is high-interest, but enable borrowers to obtain bigger loans for extended amounts of time. The installment loans wouldn’t normally replace current pay day loans, but will be a completely new product with a high charges for people who create a much greater risk that borrowers are certain to get caught into the predatory lending financial obligation trap.

Payday loan providers in Louisiana currently make high-interest loans of $50 to $350 that really must be repaid within 60 times. The proposed bills would also enable loans from $500 to $1,500, with payment periods enduring from half a year to at least one 12 months. The middle for Responsible Lending calculates that the $500 loan, repayable over half a year, would carry a 245 % percentage that is annual (APR), whenever all charges are included.