I have actuallynвЂ™t slammed payday lending for a long time now, therefore I figured it is about time.
What Exactly Are Pay Day Loans?
IвЂ™ve attempted during my overly wordy and complex solution to explain payday financing in past articles (see for example Reverse Bank Robbery, Banking institutions Now Payday Lenders , and Wonga: So Wronga), but this 76-second movie may be the easiest, clearest description of payday lendingвЂ™s ugliness that IвЂ™ve seen.
When you look at the videoвЂ™s instance, John ultimately ends up spending seven $75 feesвЂ”$525вЂ”to borrow $500 for 12 days. In APR terms, that actually works away to about a 390% annualized rate of interest that John paid on their $500 loan. Big Ouch.