High Cost Lenders
In this dataset, high cost lenders include payday lenders and vehicle title lenders. Also known as predatory lenders, high cost lenders market their loan products to consumers who need quick cash but may not qualify for loans at traditional financial institutions because of their credit history or income. However, high cost loans can be dangerous as they carry an average annual percentage rate (APR) of 391% as compared to about 10% for banks and credit unions. These extremely high interest rates, often accompanied by additional fees, mean that loan recipients who cannot pay back their loans on time quickly accrue debt that can become insurmountable and financially devastating. Especially in low-income communities that lack access to banks and credit unions, consumers often turn to high cost lenders for help paying bills.