Payday Loans - Forever in Debt
Kathy Kristof reports in this morning's Los Angeles Times on payday lenders.
The payday lending industry, virtually nonexistent a decade ago, accounts for roughly $25 billion annually in loans, according to a recent study. More than 90% of payday loans are made to repeat borrowers such as Monti, whose short-term cash crisis was only worsened by the quick fix.
The article goes on to say:
The typical annual effective percentage rates on payday loans range from 391% to 443%, according to a study (PDF) released last month by the Center for Responsible Lending. Payday lenders get around state usury laws by characterizing the cost as a fee rather than an interest rate.
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