Content tagged “Loans”

La. ranked No. 5 nationally for share of residents with debt in collection

The average Louisiana borrower has debt of just under $4,200 in collection. And while that's the lowest average amount among all U.S. states, a new analysis from financial news website 24/7 Wall Street says the financial distress in the Pelican State is far more widespread than in most other states. Nearly 44% of Louisiana residents residents with credit histories had debt in collection last year, which is the fifth highest rate in the nation. 24/7 Wall Street says in an analysis of the numbers that low wages are one likely contributor to the high rate of residents with debt in collection. Louisiana is home to the third highest poverty rate in the nation, according to the analysis, with 19.9% of Louisianans living below the poverty line. Louisiana is also home to the nation's eighth lowest median income at $42,944. "Louisiana residents have lower-than-average credit card debts and smaller mortgages but take out larger loans for automobiles compared to most Americans," reads the...

Up to $50K available in BR to some homebuyers through assistance program

Mayor Kip Holden's office announced today that prospective homebuyers can receive up to $25,000 in assistance for the purchase of existing homes and up to $50,000 on new construction under the City-Parish Office of Community Development's Homebuyer Assistance Program. Funded by the U.S. Department of Housing and Urban Development, the program provides interest-free loans as gap financing for people who might not otherwise qualify for the mortgages necessary to purchase the homes. Participating homebuyers must have not owned a home in the last three years, or they can also qualify as a displaced homemaker or single parent. They also must meet certain income limits. For example, a two-person household can earn a maximum of $42,500 per year to qualify. A household of four can earn a maximum of $53,100 annually. The interest-free loans must be paid off upon the sale or transfer of the purchased property. However, borrowers who take advantage of the program can repay the loan at any...

Payday loan rates in La. would be capped under new bill

Payday lending businesses in Louisiana that offer quick, upfront cash for costly repayment rates are targeted for tougher regulations this year by organizations that represent the elderly and the poor. The Associated Press reports they want lawmakers to cap the fees that can be charged by the storefront lenders at an interest rate of no greater than 36% annually. Supporters of the proposal say the short-term loans currently carry exorbitant fees that put borrowers in never-ending cycles of debt. The tougher restrictions are proposed in bills sponsored by Rep. Ted James of Baton Rouge and Sen. Ben Nevers of Bogalusa. They will be considered in the legislative session that begins Monday. Payday lenders say if lawmakers approve the measures, they could put payday loan stores out of business and send their customers to more expensive, unregulated borrowing options. Louisiana Budget Project Policy Analyst David Gray recently estimated

Face-off

Payday lenders, often seen operating out of low-rent storefronts, give customers stopgap loans that typically are due in two weeks. Critics say these businesses charge exorbitant interest rates and trap borrowers in a cycle of high-cost loans. But the industry says it provides a useful service for people without access to traditional loans or credit.

Financing the boom

The manufacturing boom looming large in south Louisiana has brought with it not only a boom in construction but a boom in financing as well.

LBP advocates for legislative reforms on La. payday lenders

Payday lending storefronts outnumber McDonald's restaurants 4 to 1 in Louisiana, according to David Gray, a policy analyst with the Louisiana Budget Project. Addressing the Baton Rouge Press Club today, Gray said the payday lenders are concentrated in low-income areas of the city—such as the Plank Road and Florida Boulevard corridors—and typically target potential long-term borrowers, because that's where the profit lies. When a borrower can't pay back a loan in two weeks, Gray said, they're typically forced to either refinance the loan or take out a second loan from a different lender to pay back the first. This creates a vicious cycle of long-term debt, Gray said; one in which more than 57,000 Louisiana households are trapped, according to an LBP estimate. The average borrower trapped in this cycle will take out an average of nine loans per year and pay as much as $270 in fees for a one-time loan of $100, Gray said. Payday lenders in the state are allowed to charge up...