Released: April 13, 2009

391 percent payday loan

Source: New York Times (Free Registration)

It seems like just a little loan, a few hundred dollars in advance of payday. But at an interest rate of $15 per $100, that little loan gets big in a hurry. And if another loan is needed — which sometimes happens, since the last payday loan took so much pay — total costs can soon exceed the amount borrowed in the first place. Payday loans — advances that are to be repaid on payday — are so burdensome and so pernicious that in 2006 Congress effectively banned them for military families.

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