We have actuallyn’t slammed payday lending for a long time now, it’s about time so I figured.

Exactly What Are Pay Day Loans?

I’ve attempted during my overly green lenders wordy and way that is complex 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 video clip could be the easiest, clearest description of payday lending’s ugliness that I’ve seen.

Into the video’s example, John ultimately ends up having to pay seven $75 fees—$525—to borrow $500 for 12 days. In APR terms, that actually works off to of a 390% annualized rate of interest that John paid on their $500 loan. (more…)