Category Archives: Maine Payday Loan

Could Limitations on Payday Lending Hurt People?

Payday advances are a lot easier than hoping to get a financial loan, or working with lots of hese other alternatives

When teaching about price ceilings and cost floors, we toss in a often bit about usury regulations as one example of a cost ceiling. However the example that is usury did actually me personally extremely pedagogically effective: this has a whiff of anachronism. A far greater instance allowing you to connect with pupils is always to talk about payday financing. Kelly Edmiston associated with the Kansas City Fed raises lots of the key problems in: « Could limitations on Payday Lending Hurt people? « 

A loan that is payday involves a borrower writing a look for, state, $200, then receiving $170. The lending company guarantees to not ever cash the look for fourteen days. These charges are interest as Edmiston says: « While payday lenders often charge fees rather than interest payments, in effect. Comparing the regards to varying kinds of loans requires computing a fruitful, or suggested, annual rate of interest. For payday loans, this calculation is straightforward. A typical pay day loan fees $15 per $100 borrowed.