Cap Payday Lending Interest Rates
Targeting Low Income Families & Children
Payday loans are hurting low income families each and every day. But, what are payday loans? Payday loans are short term loans, but come with extreme interest rates. According to Credit.com, payday loans are specifically targeted to people with certain characteristics: renters, no four-year college degree, earn less than $40,000 a year, African-American, and separated or divorced. Payday loans may seem like a useful thing, which they can be. However, many borrowers get into trouble when they are unable to repay their debt quickly. These loans are more expensive than other types of loans because the interest rates are astronomical. According to PayDay Loan Consumer Information, “For two-week loans, these finance charges result in interest rates from 390 to 790% APR”. That is why Hoosiers all around are fighting for a cap on interest rates for payday lenders, specifically to 36% APR. If you have ever been personally affected by payday loans, please share your story below to help the Indiana Institute for Working Families increase awareness on this predatory lending. There are currently three bills this Session regarding payday loans that we will be following: SB 104, SB 84, and HB 1098. If you would like to show your support for these bills, please contact your legislators today. On behalf of the Campaign for Hoosier Families, we would like to thank Representative Carey Hamilton, Senator Eddie Melton, Senator Greg Walker, and Senator Mark Messmer for authoring these bills.
by Angela Weaver, Campaign for Hoosier Families intern