Real World PDL vs Bank APR Comparison

By | Apr 4, 2017

There is continued controversy regarding the Annual Percentage Rate [APR] of a payday loan – single payment product – versus bank overdraft fees.

Those who compete against payday loan, car title loan and installment lenders – banks, credit unions, pawn shops… always refer to payday loan APR’s as “outrageous!” And yet, a cursory review of this “APR Bank vs Payday Loan Comparison Chart” below, clearly refutes the validity of this claim.

The following chart is based upon an independent study performed by Dr. Dan Oglevee and Dr. Bill Reeves, finance professors at The Ohio State University. It compares the actual and annualized interest rates for a variety of short-term loans and banking and credit services.

Real World APR Comparison Chart Payday Loans vs Bank Overdraft

Real World APR Comparison Chart Payday Loans vs Bank Overdraft

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4 Comments so far
  1. jer austin April 4, 2017 6:19 pm

    Fascinating! Finally someone has visually demonstrated the APR rates for bank NSF charges. Thank you!

  2. mob home April 4, 2017 6:21 pm

    Nice chart! Banks have been ripping off consumers for yeras. Why do they NOT have to disclose their NSF fees? Payday loan lenders do. It’s on their walls in the stores, in their contracts in 18 pt fonts…

  3. PaydayLoanGuy April 4, 2017 6:22 pm

    You are EXACTLY right! The CFPB should require banks to post their fees.

  4. PaydayLoanGuy April 4, 2017 6:23 pm

    Thank you! Of course, it was the Ohio professors we owe a sense of gratitude to…

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