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New Indiana Legislation Can Limit Interest Levels on Pay Day Loans

New Indiana Legislation Can Limit Interest Levels on Pay Day Loans

New Indiana legislation could limit interest rates potentially on pay day loans, if help from customer advocates is sufficient to counter the lobbyist argument from the bill. Senate Bill 104 would cap Annual Percentage prices at 36 per cent for loans as high as $605 with a term that is two-week. a comparable bill had been killed this past year rather than reached the Senate.

The coalition of supporters for the legislation includes organizations that are faith-based customer advocacy companies, nonprofits, among others. These advocates contend that pay day loans are predatory in nature, causing undue monetary injury to susceptible people. Cash advance providers in Indiana can charge up to legally 391 % APR. An average of, it costs borrowers $440 to obtain $300 for five months in Indiana, based on Pew Charitable Trusts. The costs that are exorbitant with payday loans trap borrowers with debt, draining $70 million each year in charges from borrowers and on occasion even resulting in bankruptcy. Continue reading