1. A workshop sponsored by the Kansas City Public Library
Payday Loans
A workshop sponsored by the Kansas City Public Library

2. Objective What is a Payday Loan Types of Payday Loans
Missouri and Kansas Laws
Alternatives and Repayment
New Regulations
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3. Information About Payday Loans
Payday loans are an expensive form of credit
Online payday loans are the fastest growing loan service
12 million Americans take out payday loans each year
Payday consumers spend more than $7 billion on loan fees each year
The payday loan market is not competitive, so lenders charge the max rate
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4. Common Reasons For the Loan
Shortfalls
No emergency savings
Risky credit or no credit
Expenses outweigh income
Fast and convenient
Less underwriting
Not banking
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5. What is a Payday Loan
A payday is a short-term loan that is generally $500 or less that is secured by a personal check or paid by electronic transfer. The loan is typically due on the consumer’s next pay period.
Characteristics of payday lenders
Consumers
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6. Different Types of Payday Loans
Traditional- Storefront Payday Loan
Title Loan
Online Payday Loan
High-Interest Installment Loan
Pawn Shop Loan
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7. Traditional Storefront Rollover Renewal Limits Charge per $100
Interest rates are typically over 400%
7-14 day loan
$500 max
Rollover
Renewal
Limits
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8. Title Loan A short-term loan using your car as collateral 15-30 days
High interest rate
Triple Digits
Access
Key
GPS
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9. Online Payday Loan Small cash loan accessed online
Electronic access to your checking account
High interest rate
Risk Factors
Legal
State stance
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10. High Interest Installment Loan
Unsecured loan paid in small monthly increments
High interest rate
Triple digits
Term: Months to years
Storefronts
Online
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11. Pawn Shops Collateral Loans Length of Loan: Weeks to months
Average loan amount is $150
State Law: Determine interest, extension, and renewal
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12. Latoya Woods Women's Employment Network p:

13. Debt Trap Snap Shot Original Loan Agreement Renewal Chart:
Loan Amount
Cost
Total Amount
Time Frame
Apr
500.00
65.00
565.00
2 weeks
474.50%
Renewal Chart:
1 Month
2 months
3 months
65.00
Total:
130.00
Total Amount:
Renewal: $ Loan: $ = Overall Total: $955
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14. Missouri Law Maximum loan amount Term Renewals Fee or rate Laws
Snap Shot (2014)
Maximum loan amount
$500
Term
Minimum of 14 days
Maximum of 31 days
Renewals
Limited to 6
Fee or rate
Max of 75% of the original principal interest/1980%
898 payday lenders
1.87 million payday loans issued
Average loan amount of $309.64
APR: %
$53.67 on a 14-day loan
32 complaints
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15. Kansas Law Maximum $500 2 loans per borrower 3 loans per 30 days
Rate/Fees
$15 per $100
Term
Min 7 days
Max 30 days
Rollovers
Not allowed
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16. Payday Loan Alternatives
Next Step Loan
Budgeting
Pay Yourself First
Contact your Creditors
Credit
Banks
Overdraft
Loans
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17. Repayment Stop Out of the Box Research Talk to your creditors
Raise the cash/Sell
Adjust your tax withholdings
Secondary employment
Cash advance from employer
Borrow
Credit Card
Bankruptcy
Stop
Research
Talk to your creditors
Installment plans
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18. Legal Action Collections Closing your account Judgments Garnishments
Future access
Banking history
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19. Consumer Rights Truth and Lending Statement
Disclosure
Tips to avoid predatory lenders
Consumer Financial Protection Bureau
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20. Resources and References
Consumer Finance Protection
Federal Trade Commission
Consumer.gov
Center for Responsible Lending
AFSA Education Foundation
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21. Resources and References
Lutheran Social Service
Ebony
CCO
Missouri Department of Finance
finance.mo.gov
Kansas Statue
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22. H&R Block Business & Career Center
At the Kansas City Public Library
3rd floor of Central Library, 14 W. 10th St.
Books on personal finance, job hunting, small business development
Personal finance: Budgeting, credit, investing, real estate, identity theft
Personal finance website (Sign up for more workshops on this website)
Computers with software for resume and business plan writing
Resources for nonprofit development

23. Financial Opportunity Centers
Women’s Employment Network
920 Main St, Suite 100
Kansas City, MO 64105 P:
Guadalupe Centers Inc.
2600 Belleview
Kansas City, MO  64108 P:
Prosperity Center
5151 Troost Avenue, Suite 100
Kansas City, MO 64110 P:
Community Services League
404 N Noland Rd
Independence, MO 64050 P:
WE CAN HELP
One-on-one counseling
Financial Coaching
Budgeting
Setting future financial plans
Tools to improve credit
Accountability