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Short Term Lending. What is a Short Term Loan?. Small dollar loan to pay for an unexpected bill Instant funds to avoid more costly alternatives No credit check Average loan is around $350 for 2 weeks Requirements are steady income and checking account . What is the Process?. - PowerPoint PPT Presentation
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Short Term Lending
What is a Short Term Loan?• Small dollar loan to pay for an unexpected bill
• Instant funds to avoid more costly alternatives
• No credit check
• Average loan is around $350 for 2 weeks
• Requirements are steady income and checking account
What is the Process?•Fill out a customer application•Provide proof of income/checking account•Will loan up to 35% of GMI•Write a check post-dated for your next
payday
•Option to extend the due date for additional finance charge
•We encourage our customers to pay extra towards principal
More About Check City•Doing business in Utah for over 17 years•28 Locations in Utah•Largest short term lender in the state•Accredited with the BBB•Member of Community Financial Services
Asso.•Member of Utah Consumer Lending
Association
Finance Charge•Utah State regulations limit interest to 10
weeks •Our loans are $8 per $100 / week•Cheaper than other alternatives
▫Bounced checks▫Late payment penalties▫Ding on credit score▫Utility reconnections fees
Cost Comparison / Bank PDLCost to Salt Lake Consumers for $100.00 loan for 7 days
Payday Lender Wells Fargo Bank Mountain America CU
Product Name Cash Advance1 Direct Deposit
Advance2 My InstaCash3
Loan Amount $100.00 $100.00 $100.00
Term 7 days 7 days 7 days
Cost of Credit $8.00 $10.00 $15.00
Repayment Amount $108.00 $110.00 $115.004
APR 417.14% 521.43% 782.14% 1 According to Utah Consumer Lending Association Data as of January 1, 2010 2 According to Wells Fargo Website as of June 27, 2008: https://www.wellsfargo.com/help/faqs/dda_faqs 3 According to Mountain America Credit Union Website as of September 28, 2010: http://www.macu.com/home/personal/personalloans/personalloans 4 Federally Chartered Credit Unions do not pay taxes on profits
Cost Comparison / AlternativesPayday Advance: A Cost Comparison
Payday advance fees are lower than many of consumer’ alternatives, even when expressed as an annual percentage rate (APR) for a one week “loan”.
APR Comparisons on Payday Advance Alternatives (7-Day Term)
Sources: Avg. NSF Fee $28.23 (Bankrate.com, Dec. 2007); Avg. merchant returned check fee $26.64 (2006 CFSA fee survey); Avg. Utility late and reconnection fee (2006 CFSA fee survey); Avg. credit card late fee (Credit Cards: Increased Complexity in Rates and Fees, Government Accountability Office, 2006); Avg. overdraft protection fee (Bankrate.com, Dec. 2007); Typical one week payday advance fee (UCLA).
0.00%
500.00%
1000.00%
1500.00%
2000.00%
2500.00%
3000.00%
$100 Payday Advance $100 Overdraft Protection
Credit Card Late Fee Late/Disconnect fee on Utility
$100 Bounced Check NSF/Merchant
417.14%
1512.14%
1928.29%
2406.91%
2861.08%
APR
Credit Alternative
$100 Payday Advance
$100 Overdraft Protection
Credit Card Late Fee on $100 Bill
Late/Disconnect fee on $100 Utility Bill
$100 Bounced Check NSF/Merchant
Fee $8.00 $29.00 $37.00 $46.16 $54.87 APR 417.14% 1512.14% 1928.29% 2406.91% 2861.08%
Regulation in Utah• 10 week interest rate cap• Interest free payment plan• Annual audits by Utah State Department of
Financial Institutions (DFI)• Written and verbal disclosure of finance
charge and interest rate• Display all fees in lobby on a prominent sign
Other Services• Check Cashing• Wire Transfer Services• Tax Preparation • Auto Title Loans• Renter and Auto Insurance• Pre-Paid Debit Cards• Free Money Orders• Phone Cards• Precious Metals
The Facts•Other financial institutions find it too
expensive to market and service small loans•The average payday loan is 2-3 times less
expensive than overdraft charges•Available 7 days a week and also online at
www.checkcity.com•Loans are approved same day and the
financial dilemma is taken care of immediately
•Over a million transactions last year
Benefit to the Landlord•Your Tenant will receive a 20% discount!•Rent will be paid on time•Less hassle and stress, we take on the
risk•Avoid expensive and timely evictions
•Check City always has the Win/Win mentality
•Extension to your team
Questions / Contact Info•Please visit our website: www.checkcity.com
Check City Contacts:•Dee Dee Brownlee 801-755-0025