Short-Term, Small-Dollar Lending: Policy Problems and Implications

Short-Term, Small-Dollar Lending: Policy Problems and Implications

Appendixes

Summary

Short-term, small-dollar loans are consumer loans with fairly low initial major amounts (frequently significantly less than $1,000) with fairly repayment that is short (generally speaking for a small amount of weeks or months). Short-term, small-dollar loan items are commonly used to pay for cash-flow shortages that will happen as a result of unforeseen costs or durations of insufficient earnings. Small-dollar loans could be available in various kinds and also by a lot of different loan providers. Banking institutions and credit unions (depositories) will make small-dollar loans through financial loans such as for instance bank cards, charge card payday loans, and bank checking account overdraft security programs. Small-dollar loans can be supplied by nonbank loan providers (alternative financial solution AFS providers), such as for example payday lenders and automobile name loan providers.Read more