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

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

Short-term, small-dollar loans are consumer loans with reasonably low initial major amounts (frequently not as much as $1,000) with fairly brief repayment durations (generally speaking for only a few months or months). Short-term, small-dollar loan items are commonly used to pay for cash-flow shortages which will happen because of unforeseen costs or periods of inadequate earnings. Small-dollar loans may be available in different kinds and also by numerous kinds of lenders. Banking institutions and credit unions (depositories) will make small-dollar loans through financial loans such as for example bank cards, bank card payday loans, and account that is checking security programs. Small-dollar loans may also be given by nonbank loan providers (alternative financial solution AFS providers), such as for example payday loan providers and car name loan providers. Continue reading “Short-Term, Small-Dollar Lending: Policy Problems and Implications”