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At some point APRs really stop making sense for two-week loans. It's easier to understand what people pay in three parts: processing costs, a risk premium, and
by fennecfoxen 5y ago
At some point APRs really stop making sense for two-week loans. It's easier to understand what people pay in three parts: processing costs, a risk premium, and the lender's margin. Fordham Journal of Corporate & Financial Law estimated the margin at 3.75%.
The argument against payday lenders is a paternalistic one with moralistic overtones, with all the potential flaws that might entail.
- deleted 5y ago[deleted]
- pnutjam 5y agoEver had a payday loan? I'm guessing no.
- fennecfoxen 5y agoi'm unsure why this would make APR a better tool to understand two-week loans, or how it would make things less paternalistic
- pnutjam 5y agoThe process is pretty demeaning and profits are higher then you think. The lenders dilute the profits by opening stores all over the place. It's a competitive industry. APR is the accepted measure for loans, why should they break the standard and get special treatment?