The Louisiana Installment Loan Act ( home Bill 501 / Senate Bill 365 ) would expand the pay day loan industry in Louisiana by enabling payday loan providers and vehicle name loan providers to provide longer-term вЂњinstallment loans.вЂќ Installment loans act like high-interest pay day loans, but enable borrowers to obtain bigger loans for extended amounts of time. The installment loans will never change current pay day loans, but could be a completely brand new item with a high charges for people who create a much better danger that borrowers are certain to get caught into the predatory lending financial obligation trap.
Payday loan providers in Louisiana currently make high-interest loans of $50 to $350 that really must be paid back within 60 days. The bills that are proposed additionally enable loans from $500 to $1,500, with payment durations enduring from a few months to at least one 12 months. The middle for Responsible Lending determines that a $500 loan, repayable over 6 months, would carry a 245 % apr (APR), whenever all costs are included.