Offering Auxiliary Products to Basic Accountholders and Noncustomers
Most banks offered check-cashing, bank checks, money orders, and remittances for existing accountholders, but not for others. The most commonly offered auxiliary products to both basic accountholders and noncustomers were payroll check cashing (71 percent for accountholders and 47 percent for noncustomers), bank or other official checks (86 percent for accountholders and 35 percent for noncustomers), and money orders (68 percent for accountholders and 33 percent for noncustomers). Compared to these commonly offered auxiliary products, domestic and international remittances were offered less frequently. Sixty-eight percent of banks offered domestic remittances to basic accountholders and 57 percent offered international remittances to basic accountholders, but only slightly more than 11 percent offered domestic and 9 percent offered international remittances to noncustomers.
Minimum Loan Amount of Unsecured Personal Loans
Eight out of ten banks offered small (under $2,500) unsecured personal loans. The survey finds that 88 percent of all banks offered unsecured personal loans. Among these banks, 43 percent of banks offered unsecured personal loans with no minimum loan amount and an additional 53 percent offered unsecured personal loans with a minimum loan amount of $2,500 or less, which are referred to collectively as small dollar loans in this report.
Features of Small Dollar Loans
Banks offering small dollar loans tended to do so with repayment terms of 90 days or more, with annualized rates of 36 percent or less, and with loan approvals in less than 24 hours. Among banks that offered small dollar loans, a large majority offered loans with a repayment period of 90 days or more, an annual percentage rate (APR) of 36 percent or less, and streamlined underwriting to make a loan decision within 24 hours. Eighty-one percent of banks with small dollar loans indicated that the associated repayment period was 90 days or more. The APR (including upfront fees) was reported to be below 36 percent at nearly 89 percent of these banks. In addition, most banks could approve a small, unsecured loan in less than 24 hours.