August 21, 2014
WASHINGTON (AP) - A report by a federal watchdog has found that about half of all payday loans are made to people who extend the loans so many times they end up paying more in fees than the original amount they borrowed.
The report released Tuesday by the Consumer Financial Protection Bureau also shows that four of five payday loans are extended, or "rolled over," within 14 days. Additional fees are charged when loans are rolled over.
Payday loans, also known as cash advances or check loans, are short-term loans at high interest rates, usually for $500 or less. They often are made to borrowers with weak credit or low incomes, and the storefront businesses often are located near military bases. The equivalent annual interest rates run to three digits.
Copyright 2014 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Viewers with disabilities can get assistance accessing this station's FCC Public Inspection File by contacting the station with the information listed below. Questions or concerns relating to the accessibility of the FCC's online public file system should be directed to the FCC at 888-225-5322, 888-835-5322 (TTY), or email@example.com.