Plus, in order to get those 20% loss rates, you have to decline 80% of people, and half the 20% accepted will decide the rates are too expensive. So only 10% of applicants end up taking a loan. Then a $10 per application marketing/processing cost and $5 per application decisioning cost translates to $150 cost per loan booked.

Using the numbers above, it would cost $350 to lend $1000. That's 35%. If the loan term is 2 months, the APR is annualized by compounding that 35% 6 times, giving 500%. If the loan is amortizing, the APR calculation comes out a lot higher, probably more like 1000%.

This is the fundamental economics of high-cost, short-term credit (HCSTC).

It is UK, where I am, HCSTC is highly regulated by the FCA. The nominal interest APRs are less important that a regulatory rate cap: customers cannot be charged more than 100% total interest and fees for loans up to 12 months.