Economics @ ITT

Installment loans trap low-income borrowers with 182 percent interest rates

Posted in economics by ittecon on May 13, 2013

Installment loans have been around for decades. While payday loans are usually due in a matter of weeks, installment loans get paid back in installments over time 2014 a few months to a few years. Both types of loans are marketed to the same low-income consumers, and both can trap borrowers in a cycle of recurring, expensive loans.

Installment loans can be deceptively expensive. World and its competitors push customers to renew their loans over and over again, transforming what the industry touts as a safe, responsible way to pay down debt into a kind of credit card with sky-high annual rates, sometimes more than 200 percent.

via Installment loans trap low-income borrowers with 182 percent interest rates | The Raw Story.

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