NPR’s Scott Simon talks with Diane Standaert associated with the Center for Responsible Lending about automobile name loans.
SCOTT SIMON, HOST:
Diane Standaert regarding the nonprofit Center for Responsible Lending in Washington, D.C., joins us now. Many Thanks quite definitely if you are with us.
DIANE STANDAERT: thank you for the chance to speak with you.
SIMON: we are discussing automobile name loans and customer finance loans. Exactly what are the differences?
STANDAERT: vehicle title loans typically carry 300 % interest levels and they are typically due in 1 month and just simply take usage of a debtor’s vehicle title as protection when it comes to loan. Customer finance loans don’t have any limitations regarding the prices that they’ll charge as well as simply take usage of the debtor’s vehicle as protection when it comes to loan. And thus in certain states, such as for example Virginia, there’s extremely small distinction between the predatory methods as well as the effects for consumers of those forms of loans.
SIMON: Just how can individuals get caught?
STANDAERT: lenders make these loans with little to no respect for the debtor’s capability to really pay for them considering the rest of the expenses they could have that thirty days. And instead, the financial institution’s enterprize model is dependant on threatening repossession of this security to keep the borrower having to pay charges, thirty days after thirty days after thirty days.