With yearly interest levels around 400 per cent, pay day loans are called exploitative by experts. But the industry states those prices are essential. And almost 90% of borrowers are happy clients. (picture: stallio)
Our latest Freakonomics Radio episode is called “Are pay day loans Really as wicked as People Say?” (You can contribute to the podcast at iTunes or somewhere else, have the rss, or pay attention through the news player above.)
Experts — including President Obama — say short-term, high-interest loans are predatory, trapping borrowers in a period of financial obligation. However some economists see them as a good instrument that is financial those who require them. Whilst the customer Financial Protection Bureau encourages regulation that is new we ask: who’s right?
Below is just a transcript of this episode, modified for the reading pleasure. To learn more about the individuals and a few ideas when you look at the episode, start to see the links at the end for this post. Continue reading