The new Year brings us another payday loan law. The State of New Hampshire now has a payday loan law that caps the interest rate on small loans at 36 percent a year, which the industry has said will put it out of business.
Payday lenders typically charge $20 per $100 for two-week loans backed by the borrower's car title or next paycheck. That amounts to 1.43 percent interest per day, an annual rate of 521 percent.
The cap translates to a daily interest rate of about 0.1 percent, or total interest charges of $1.38 – a dime a day – on a $100, two-week loan.
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