NATIONAL CONSUMER Installment Loans LAW CENTER WILL …
[Pages:18]N C L C?
NATIONAL CONSUMER
LAW
? C E N T E R
Installment Loans
WILL STATES PROTECT BORROWERS FROM A NEW WAVE OF PREDATORY LENDING?
? Copyright 2015, National Consumer Law Center, Inc.
CHARTS
CHART 1
Full APRs Allowed for a Six-Month $500 Loan
No cap: 4 states
No cap other than unconscionability:
4 states
CHART 2
Full APRs Allowed for a Two-Year $2000 Loan
No cap: 5 states
No cap other than unconscionability:
6 states
36% or less: 20 states
Over 60%: 10 states
36% to 60%: 13 states
36% or less: 32 states
Over 60%: 1 state
36% to 60%: 7 states
No stated cap on finance charges
No numerical cap, but prohibits unconscionability (loan terms that are so one-sided as to shock the conscience)
Allowable full APR over 60% Allowable full APR between 36% and 60% Allowable full APR of 36% or less
?2015 National Consumer Law Center
Installment Loans, Charts, Maps, Tables 1
CHART 3 How Add-Ons Swell the Cost of a Ten-Month Loan
$1000 total repayment of obligation
Interest
$146.96
Amount borrowed
$660.71
Add-Ons
$192.33
This example is taken from an actual loan made in Louisiana.
Origination Fee
$50.00
Documentation Fee $15.00 Disability Insurance $35.00
Non-Filing Insurance $30.00
"Fire & Misc." Insurance
Accidental Death and Dismemberment
Insurance
Life Insurance
$25.00 $24.00 $13.33
2 Installment Loans, Charts, Maps, Tables
?2015 National Consumer Law Center
CHART 4 Effect of Refinancing a $500 Six-Month Louisiana Loan Three Times
$400.10 ? 350.10? 300.10? 250.10? 200.10?
Doc fee Interest Origination fee
114% APR $30.48
132% APR $40.96
$124.18
145% APR $51.44
$152.75
150.10?
100.10?
50.10?
0.10?
85% APR $20.00 $61.32
$50.00
Original Loan
$93.96 $100.00
$150.00
$200.00
1st Refinancing 2nd Refinancing 3rd Refinancing
The example assumes that 1) the borrower refinanced the loan three times, each time after making the second payment; and 2) the borrower did not obtain any new money upon refinancing, but simply refinanced the remaining balance each time so that it would be repayable over six months. The result of the three refinancings is an increase in the repayment period from 6 months to 12 months.
?2015 National Consumer Law Center
Installment Loans, Charts, Maps, Tables 3
CHART 5 Effect of Refinancing a $2000 Two-Year Louisiana Loan Three Times
$2,000? $1,500? $1,000?
$500?
Doc fee Interest Origination fee
39% APR $20.00
$828.81
43% APR $24.60
$1,025.78
47% APR $29.20
49% APR $33.80
$1,219.99
$1,411.12
$0?
$50.00
Original Loan
$100.00
1st Refinancing
$150.00
2nd Refinancing
$200.00
3rd Refinancing
The example assumes that 1) the borrower refinanced the loan three times, each time after making the third payment; and 2) the borrower did not obtain any new money upon refinancing, but simply refinanced the remaining balance each time so that it would be repayable over six months. The result of the three refinancings is an increase in the repayment period from 24 months to 33 months.
4 Installment Loans, Charts, Maps, Tables
?2015 National Consumer Law Center
Remaining Balance
CHART 6
Remaining Principal Balance by Month $500 Loan with $50 Semi-Monthly Payments
Six-Month v. Two-Year Term
$500? $450?
$400?
$350?
$300?
$250?
$200?
$150?
$100?
$50?
$0?
0
5
10
15
20
25
30
Month
$500 loan, 12 semi-monthly payments (APR of 70%) $500, 52 semi-monthly payments (APR of 237%)
?2015 National Consumer Law Center
Installment Loans, Charts, Maps, Tables 5
MAPS
MAP 1
Full APRs Allowed for Six-Month $500 Installment Loan
WA 39%
OR 36%
ID no cap*
MT 36%
WY 36%
CA 45%
NV 40%
UT no cap*
CO 90%
AZ 54%
NM no cap*
AK 36%
ND 28%
SD no cap
NE 48%
KS 43%
MN 51%
WI no cap*
IA 36%
MO no cap
IL 99%
OK 116%
TX 93%
AR 17%
LA 85%
MS 52%
ME 30%
VT
24% NH
36%
NY 25%
MA 37%
MI
43%
RI 35%
OH
PA 27%
NJ 30%
CT 28%
IN
no cap
71% WV
DE no cap MD 33%
38%
VA
DC 27%
KY
36%
47%
NC
TN
16%
94% SC
72%
AL 94%
GA 61%
FL 48%
HI 25%
6 Installment Loans, Charts, Maps, Tables
?2015 National Consumer Law Center
MAP 2
Full APRs Allowed for Two-Year $2000 Installment Loan
WA 29%
OR 36%
ID no cap*
MT 36%
WY 31%
NV
40%
UT
no cap*
CA 25%
CO 31%
AZ 41%
NM no cap*
AK 31%
ND no cap
SD no cap
NE 30%
KS 32%
MN 31%
WI no cap*
IA 31%
MO no cap
IL 79%
OK 27%
TX 35%
AR 17%
LA 38%
MS 39%
ME 30%
VT
21% NH
36%
NY 25%
MA 24%
MI
30%
RI 29%
OH
PA 24%
NJ 30%
CT 23%
IN 39%
no cap WV
DE no cap MD 30%
33%
VA
KY
36%
DC 25%
39%
NC
TN
31%
41% SC
no cap*
AL no cap*
GA 32%
FL 31%
HI 31%
?2015 National Consumer Law Center
Installment Loans, Charts, Maps, Tables 7
MAP 3
Full APRs Allowed for a $500 Cash Advance Repayable Over Six Months
WA no fee
cap
OR 36%
ID no cap*
MT
WY no fee
cap
CA no fee
cap
NV 54%
UT no cap*
CO no fee
cap
AZ 54%
NM no cap*
AK 36%
ND
SD no cap
NE 48%
KS no cap*
MN 89%
WI no cap*
IA no cap*
MO no cap
IL no cap
OK no fee
cap
TX 62%
AR
LA 85%
MS no fee
cap
ME no cap*
VT
MI no fee
cap
IN no fee
cap
OH no cap
WV no fee
cap
KY
NY 25%
NH no fee cap MA no fee cap
PA 59%
VA no cap
NJ 65%
RI no cap CT 54%
DE no cap MD no fee cap DC
TN 279%
AL 39%
NC 18%
SC no fee
cap GA
FL 48%
HI no fee cap
8 Installment Loans, Charts, Maps, Tables
?2015 National Consumer Law Center
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