Quick Consumer Loan
The Quick Consumer LoanThe California Reinvestment Coalition (CRC) is advocating with banks and savings & loans for a low-cost consumer loan known as the Quick Consumer Loan, designed as an alternative to payday lending. The Quick Consumer Loan has a longer term, lower interest rate and does not allow extension of the loan.
The following is a list of general problems with payday loans:
- High interest rates of 400 to 500 percent APR
- Allows loan to rollover endlessly causing the interest cost to skyrocket
- Borrower cannot make partial payment
The Quick Consumer Loan would have the following features:
- Customer with direct deposit and regular paycheck
- Loan at $1 per $40 borrowed (30 percent APR)
- Loan term: Two months
- Loan cannot be taken out for a third consecutive month
- Partial payments allowed
- Loan is only available a maximum of three times per year with at least one month between loans
