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>so that they can charge many times the original amount in interest per year. These are short term (till the next payday) loans. Thats like saying a hotel room

• hnmullany 8y ago
  But a hotel does cost $36,500 a year if you stay in it that much and that's closer to what a substantial percentage of pay day borrowers actually end up doing: >> Payday loans are often thought of as “two-week” loans, which aligns with the data’s median term >> of 14 days. However, since the terms of these loans are often tied to the borrower’s pay cycle, >> which can vary by employer and source of income, the average loan length is 18.3 days. >> And while payday loans are marketed as short-term solutions — get cash now, pay it back in two >> >> weeks — the CFPB found that over the course of 12 months, more than one-third of borrowers will take >> out between 11 and 19 payday loans. Fourteen percent of borrowers will take out 20 or more payday >> loans within this same time period. >> It’s on these borrowers that payday lenders make the most money. According to the CFPB, 76% of >> lenders’ fees come from borrowers taking out at least 11 loans in a year. from: https://consumerist.com/2013/04/26/the-average-payday-loan-borrower-spends-more-than-half-the-year-in-debt-to-lender/ https://consumerist.com/2013/04/26/the-average-payday-loan-b...