News

The Real Reason that Payday and Title Loans are a Massive Problem

September 2016

New research from the Consumer Financial Protection Bureau shows just how easy it is for cash-strapped borrowers to get sucked into a vehicle title loan debt trap.

Auto title loans share many of the same nefarious qualities that have made their cousin, the payday loan, such a hot target for regulators. Both products are fueled by triple-digit interest rates (except in states where they are either banned or have specific interest rate caps) and are issued without taking into account the borrower's ability to repay the loan. While payday lenders use a borrower's proof of income (like a pay stub) to underwrite their loan, auto title lenders use a borrower's car as collateral.

Read More...
http://finance.yahoo.com/news/payday-auto-title-loans-CFPB-211701904.html