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In a competitive market the right price would be one which generates a positive but very tiny profit. These big payday lenders make money hand over fist though.
by frgtpsswrdlame 8y ago
In a competitive market the right price would be one which generates a positive but very tiny profit. These big payday lenders make money hand over fist though.
- whatok 8y agoI agree with your first statement but do not have any aggregate numbers to argue against the second. Do you have any?
- vageli 8y ago> In a competitive market the right price would be one which generates a positive but very tiny profit. These big payday lenders make money hand over fist though. Is this not an inversion of the risk associated with these loans? It was my understanding that riskier loans are assessed at higher rates of interest _because of_ the likelihood of default. Thus, extract as much as quickly as possible before the default. How would companies profit if the successfully serviced loans did not offset the defaults, given these loans are not secured with another asset?
- ikeboy 8y agoWhy isn't the market competitive, then?