How to Make the Poor Poorer: Payday loans

I have for a number of years on these pages deplored the activities of the payday loan companies. I have always held that payday loans should be illegal, if the interest rate charged exceeds a certain amount. I would propose no more than 100% per annum, as an APR as the maximum rate of interest, which would prevent payday loan companies from charging 3000% or 4000% per annum. Continue reading

Payday Loans

They call them “payday loans” because these are loans intended to be made for a few days to tide a person over from one payday to the next. They are at astonishing high rates of interest – rates which forty years ago (when inflation was higher) would have been considered so high by the courts that they would have been ruled illegal, because the rate made it very hard to repay. This often happens today but the rules have been skewed; instead of favouring equity, they favour the money that makes these unconsciousonable lending. Continue reading