We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
Interest Rate on Small Loans.
- Authors
Shafer, Joseph E.
- Abstract
Some light may be thrown on the reasonableness of the interest charge by the experience of commercial banks in the making of small loans. The American Bank and Trust Co. of Bridgeport makes loans of this type secured by endorsement. Interest of 6 per cent is deducted in advance and the borrower agrees to repay the loan in twenty-five weekly installments. At first this bank made an additional service charge of approximately 1 percent and a small insurance charge. Both these charges have since been discontinued because of a "feeling that they were unjust and that the 6 percent interest for the length of time the note was to run was ample remuneration." While this amounts to an interest charge between 12 percent and 18 percent, this is far short of the 42 percent authorized by law.
- Subjects
PERSONAL loans -- Law &; legislation; INTEREST rates; CONSUMER credit; ECONOMIC demand; INSTALLMENT plan; CREDIT; BANKING industry
- Publication
American Economic Review, 1929, Vol 19, Issue 4, p642
- ISSN
0002-8282
- Publication type
Article