Will Small Dollar Loans from Banks Put Payday Lenders Out of Business
Four major banks now offer low-cost, short-term loans
The payday lending industry capitalizes on the need to access short-term cash quickly — usually for an emergency or unplanned expense. Most major banks don’t offer these types of products — loans for $500 or less — because the cost to issue and service these loans outweighs the revenue.
One survey suggests that more than 1/3 of Americans have signed up for some type of payday lending app — like Dave.
A Broken Economy?. When 33% of Americans need payday… | by Andy Spears | Oct, 2022 | Medium
These app-based lenders — Dave, MoneyLion, SoLo Funds — offer convenience that often comes at a high cost. That is, interest rates well into the triple digits.
Then, of course, there are the traditional storefront payday lenders — companies like SpeedyCash, Check into Cash, Advance America, and others.
