Comments on: Wisconsin Catholic Conference supports payday loan limits http://bloggingblue.com/2009/09/08/wisconsin-catholic-conference-supports-payday-loan-limits/ Blogging Liberally in the Badger State Thu, 09 Feb 2012 02:03:52 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: payday lender http://bloggingblue.com/2009/09/08/wisconsin-catholic-conference-supports-payday-loan-limits/comment-page-1/#comment-15056 payday lender Mon, 05 Oct 2009 00:09:28 +0000 http://bloggingblue.com/?p=5296#comment-15056 This is a tough issue any way you slice it. Yes, the interest rates are definitely very high on payday loans, often in the neighborhood of $20 per $100 loaned. But there are also credible studies such as those published by the Fordham Journal of Law & Finance which show that these high interest rates are not equating to high profit margins for payday lenders. Due to the high rate of borrower defaults, most lenders have margins of less than 5%. So it seems like lenders have to charge the rates they do to stay in business. That said, perhaps capping rates will increase the number of customers willing to accept the terms of a payday loan, reversing the effects hoped for by opponents of the industry at large. This is a tough issue any way you slice it. Yes, the interest rates are definitely very high on payday loans, often in the neighborhood of $20 per $100 loaned. But there are also credible studies such as those published by the Fordham Journal of Law & Finance which show that these high interest rates are not equating to high profit margins for payday lenders. Due to the high rate of borrower defaults, most lenders have margins of less than 5%. So it seems like lenders have to charge the rates they do to stay in business. That said, perhaps capping rates will increase the number of customers willing to accept the terms of a payday loan, reversing the effects hoped for by opponents of the industry at large.

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