Payday Loans: Example

An OppLoans eBook


Example

The following is a model for loans of typical payday loans. [24].

 

*Adapted from Single Payment Deferred Presentment [26]
*Loan term is 14 days, CAB (Credit Access Bureau) monthly fee is 25%, Lender Annual Interest Rate is 10%

*Adapted from Single Payment Deferred Presentment  [26]
*Loan term is 14 days, CAB (Credit Access Bureau) monthly fee is 25%, Lender Annual Interest Rate is 10%

The maximum online loan amount is $1500. Consumers need to provide a social security number, government photo ID, checking account & routing number, and proof of income to receive a loan. Also, the online application process is restricted to consumers who are 21 and older [26].

If a consumer were to borrow the Texas maximum of $1,500, the amount repaid within 15 days would be $1,882.19. The Total Fees repaid – which includes the monthly CAB (Credit Access Bureau) Standard fee of 25% and the Lender’s annual interest rate of 10% – are 25.48% of the original loan amount, or $382.19. Overall, the APR of the loan is 664.28%. [26]

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