Post by Logan on Jun 12, 2016 18:47:50 GMT -6
No relief from state's 565% payday loan interest under new rules
In 2014, hunger drove Michelle Warne of Green Bay to take out a loan from a local Check 'n Go. "I had no food in the house at all," she said. "I just couldn't take any more."
Over the next two years, the retiree paid off that loan. But she took out a second loan, which she has not paid off completely. That led to more borrowing earlier this year — $401 — plus $338 to pay off the outstanding balance. According to her truth-in-lending statement, paying off this $740 will cost Warne $983 in interest and fees over 18 months.
Warne's annual interest rate on her so-called installment loan was 143 percent. That is a relatively low rate compared to payday loans, or small amounts of money borrowed at high interest rates for 90 days or less.
In 2015, the average annual interest rate on payday loans in Wisconsin was nearly four times as high: 565 percent, according the state Department of Financial Institutions. A consumer borrowing $400 at that rate would pay $556 in interest alone over about three months. There could also be additional fees.
Read more: www.jsonline.com/news/statepolitics/no-relief-from-states-565-payday-loan-interest-under-new-rules-b99742201z1-382580121.html
In 2014, hunger drove Michelle Warne of Green Bay to take out a loan from a local Check 'n Go. "I had no food in the house at all," she said. "I just couldn't take any more."
Over the next two years, the retiree paid off that loan. But she took out a second loan, which she has not paid off completely. That led to more borrowing earlier this year — $401 — plus $338 to pay off the outstanding balance. According to her truth-in-lending statement, paying off this $740 will cost Warne $983 in interest and fees over 18 months.
Warne's annual interest rate on her so-called installment loan was 143 percent. That is a relatively low rate compared to payday loans, or small amounts of money borrowed at high interest rates for 90 days or less.
In 2015, the average annual interest rate on payday loans in Wisconsin was nearly four times as high: 565 percent, according the state Department of Financial Institutions. A consumer borrowing $400 at that rate would pay $556 in interest alone over about three months. There could also be additional fees.
Read more: www.jsonline.com/news/statepolitics/no-relief-from-states-565-payday-loan-interest-under-new-rules-b99742201z1-382580121.html