How does this small dollar and low income loan compare to high interest payday loans?
There are over 23,000 payday lender outlets across the country, and all together they make up the $70 billion payday-loan market. Unfortunately what all too often happens is that low and moderate income individuals, and other who may be struggling, turn to payday lenders who provide them with cash for a large fee. For example, in the state of California, a consumer can write a check to a payday loan lender for $300 to receive a two-week salary advance loan. These loans generally need to be paid back when the borrower receives their next paycheck. What the $300 covers is the following. It breaks down into a $45 fee for the lender and a $255 loan for the borrowers, which the borrower must repay when he gets his work payment. The bottom line is that equals a 460% annual percentage rate fee for the payday loan. Unfortunately what typically happens in these cases is that the consumer pays off the short term payday loan by taking out another payday loan, and paying another $45 fee. The indus
