During the past few years, lenders offering short-term loans have faced mounting criticism related to their products as well as their business models. New and pending regulations covering payday, cash advance, installment and other small-dollar personal loans have affected the industry in various ways. Whether lenders make these loans through a physical store or a website, they are being forced to adapt to change in order to survive. This report explores the state of the industry as of 2017. What Is the Current State of the Payday, Cash Advance, Installment and Personal Loan Industry in 2017? Briefly stated, the overall picture of the short-term, small-dollar lending industry is an image of a legitimate industry that is under attack from many sides. Negative statements about the industry have been made by consumer groups, …show more content…
By definition, short-term loans are those that are to be repaid quickly. The repayment term is typically no longer than 12 months, but some loans may have longer repayment schedules. These loans are not a line of credit or a form of revolving credit. Instead, they are one-time loans, so if the borrower needs additional funds in the future, he or she must submit another loan application. What Is a Payday Loan? Payday loans are small-dollar loans that are typically due in full on the borrower 's next payday. However, the due date does not have to coincide with the payday. Some lenders may allow two weeks for repayment even if the borrower is paid weekly. In some states, the minimum and maximum repayment terms are defined by law. Although "salary lenders" were active over 100 years ago, they disappeared during the first half of the 20th century. State regulations contributed to their demise, but the primary reason was the growth of the consumer financial industry. By the 1950s, consumers had widespread access to credit cards, personal loans, mortgages and other credit products, reducing the need for salary