Yes, banks make payday loans
September 2, 2009 | alternatives, industry | Comments (0)Walletpop is just discovering this:
Each bank has similar terms. You can borrow up to $500, and for each $20 you borrow, you pay $2, and you pay it back on your next direct deposit.
That winds up to a 120% APR (annual percentage rate), which is admittedly better than the payday loan establishments that charge 390-780%. But it’s still not wildly generous of the banks, if you consider that, for instance, the nonprofit Americans for Fairness in Lending promotes capping the APR at 36%. (Its reasoning is that what’s good for the military should be good for all of us: If you’re a member of the armed forces, a payday lending store can’t lend you money at higher than 36% APR.)
- U.S. Bank
- Fifth Third
- Wells Fargo
But in case anyone is keeping score, these are the banks that I know of that offer cash advances, with links to each financial institutions page, which explains everything in detail.
On the point about lending to the armed forces, a payday lending store can’t lend a member of the military money at higher than 36% and won’t. That is, they won’t lend you any money at all. Lenders imply can’t afford to make loans at $1.39 per $100 loaned.
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