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payday loan APR is generally around 300% to 700%. this is not a rate set by a market, it is the claw of a predator, useful only to deal a killing blow.
by ruined 5y ago
payday loan APR is generally around 300% to 700%. this is not a rate set by a market, it is the claw of a predator, useful only to deal a killing blow.
- whimsicalism 5y agoRates are set by a market. It's interesting how even as formal christianity is in decline, the moral constructs that it popularized (distaste for usury, protestant emphasis on liberty over well-being) morph into new forms.
- xxpor 5y agoA lot of states have capped those rates relative to prime.
- ruined 5y agowhich simply reinforces the idea that it's not a market. credit cards, too, are generally capped. the rate always maxes out the legislated cap. so it's not really dependent.
- Ericson2314 5y agoYes the market power is also one sided, capping the rate also doesn't really help without guaranteeing more access to credit. The best thing is: a) UBI, just hand out a tiny bit of money to make poor people more liquid, because liquidity kills, not insolvency b) postal banking, because even shittier than a payday loan is high fee check cashing without a pretense of debt! Poor people hopefully at the point can save up a paychecks worth of buffer in their bank account, and don't need postal bank loans to replay payday loans.
- kbelder 5y ago"Can I borrow $10? I'll pay you back $11 next week." There, you've just committed the sin of collecting 14,000% APR. You can't compare payday loans to things like mortgage rates or bond returns. It's a market, but it's a very different niche. It's like comparing the cost of mineral water at the grocery star to the cost per gallon of your tap water.