Not an alternative
November 10, 2009 | Texas, industry | Comments (2)A bank out of Amarillo is proud of its small loan product, but it’s not a payday loan. From the story:
Escajeda said that institutions like Amarillo Bank offer small-dollar loans of under $2,500 or less for an average of nine months, at a 14% to 18% annual percentage rate — a rate significantly lower than what individuals pay when over-drafting their accounts or taking out payday loans
The amount is much higher than an average payday loan and the term is much longer.
Comments»
Notice how the author narrowly focuses on the APR, which is not real money but simply an abstraction. People who focus on the APR don’t seem to realize that a 6-month loan at 36% will cost the borrower, in actual dollars, 20% more than a two-week payday loan at 390%. A 9-month loan at 18%, as discussed here, will cost the borrower 90% as much.
http://www.thonline.com/article.cfm?id=262890
Pundit here is another one today!