Payday Payoff Installment Loans

This program uses an underwriting model based on alternative data and allows borrowers to consolidate up to $2,500 of high-cost debt into an affordable installment loan. This gives borrowers the ability to build their credit profile and get out of high-cost debt. 

Payday Payoff Installment Loans Details

Every 90 seconds $67,000 in new payday loan debt is issued in the U.S. 

Alternative financial service (AFS) transactions, such as payday and auto title lending, total more than $320 billion annually and studies have found that AFS providers are disproportionately located in minority, low-income neighborhoods. Many consumers who take these loans end up taking out an additional payday loan just to pay back the first leading to an endless debt cycle that make the situation worse and worse. 

Set vulnerable populations on a path for financial recovery and health.

Credit unions in the pilot have agreed to offer the program which transforms high-cost payday and auto title loans into an affordable installment loan. Enhanced loan decisions are driven by LexisNexis Risk View, leveraging alternative consumer data. Results from the pilot will be shared with the marketplace to increase credit access for financially vulnerable populations.

Payday Payoff is one of five programs being tested in the Reaching Minority Households Incubator. Our work to research and test solutions to improve access to financial services is made possible by Visa. 

Success Story

Kinecta Federal Credit Union and Nix Neighborhood Lending’s program consolidates up to $2,500 of high-cost debt into an affordable installment loan. To date the program has issued over 11,700 loans with net charge-off rates of less than 6%.