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This is fascinating and the interest rates are nuts. The current top post is asking for $400 with plans to repay a total of $475 by the 25th which ChatGPT says is a 526% interest rate.

What’s the deal here? Are most borrowers scams? Is there no better option for the financially vulnerable? I’ll try to convince my wife it’s worth an experiment.

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that interest is about middle of the road for payday loans (UK maximum is 1,800%). The issues are a) high overhead for small loan amounts b) high risk of non-repayment, and c) lack of other options for the borrower. The result is not very pleasant: generally speaking lenders lose out on most loans (either because they are never paid back or paid back quickly), but make the money back from people stuck in the middle and pay back much, much more than the original loan amount because it takes them a long time, another 'cost of being poor'. There's varying degrees of regulation to prevent the worst abuses (for example, in the UK the payback amount is capped at twice what you borrowed) but it's still not great.

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