The Illinois governor recently signed legislation to cap interest rates on payday loans, auto title loans, and installment loans at 36%. Although some worry that caps will reduce access to credit for borrowers, many more believe the new rate cap will rein in high cost lending that lands individuals and families in a debt spiral. Advocates for the measure believe the 36% rate cap strikes a balance between access to credit while protecting consumers from predatory lending. To understand how … [Read more...]
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High Overdraft Fees Dig Bigger Hole for Struggling Consumers
According to a recent report from Pew Charitable Trusts, bank customers who use overdraft programs to bridge the gap when they are short on cash are really just getting caught in a trap of high cost credit. Of course, overdrafts on checking accounts occur when a customer spends more than is available in their account. Many overdraft protection programs allow the charge to go through, but the consumer can pay up to $35 bucks per overdraft. Not a bad deal for the banks, as it is estimated … [Read more...]
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Alternatives to Payday Loans Available
After the Consumer Financial Protections Bureau proposed a new rule imposing stricter requirements for pay day and car title loans, many who are strapped for cash wonder where to turn. Apparently, following a review of the credit market available to households with lower credit scores, alternatives are out there and they may help break the cycle of financial devastation caused by borrowers depending on a string of high-cost payday loans to get by. Here is a list of options to consider: … [Read more...]
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Payday Loans Can Spell Trouble for Consumers
The Consumer Finanacial Protection Bureau is taking aim at companies that offer high interest payday loans. New rules have been proposed to protect borrowers of these loans from an endless cycle of debt. Often times borrowers of payday loans are already living pay check to pay check and are using the loans to cover basic living expenses like rent and utility bills. Because of high interest rates, consumers end up having to borrow more and more to keep up, resulting in insurmountable … [Read more...]
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