An Illinois PayDay lender revealed sets the dates on their loans so they’re not governed under state payday law, a Credit Slips blog student discovered after interviewing the company.
This particular lender offers two types of loans. One is for 14 days and charges $15.50 for every $100. The other is a 140 day loan that works like the 14 day loan, except every 2 weeks you come in and pay $15.50.
Illinois defines payday loans as being less than 140 days. This loan is structured specifically to fall outside payday lending laws.
Math problem: Assuming a $1000 loan, what’s the interest rate and total amount owed if you did the 140 day loan for 365 days and only paid the $15.50 every 14 days? — BEN POPKEN
Talking to a Payday Lender [Credit Slips]