By Paige Marta Skiba, Professor of Law, Vanderbilt University; and Caroline Malone, Ph.D. scholar in Law and Economics, Vanderbilt University
Installment loans appear to be a kinder, gentler type of their вЂњpredatoryвЂќ relative, the loan that is payday. But also for customers, they may be a lot more harmful.
Utilization of the installment loan, for which a customer borrows a lump sum payment and will pay right right back the main and fascination with a few regular re payments, is continuing to grow considerably since 2013 as regulators started initially to rein in payday lending. In reality, payday loan providers seem to are suffering from installment loans mainly to evade this scrutiny that is increased.
A better glance at the differences when considering the 2 kinds of loans shows why we think the growth in installment loans is worrying вЂ“ and needs exactly the same attention that is regulatory pay day loans. CONTINUE