These lenders hardly reject any applicant because despite your credit worthiness good or bad will charge you an annual interest rate of 300%; but you will get that loan and you will promise to repay that loan within two weeks. (Traditional banks have a interest limit of about 39% on loans.) Some loans are processed within a half hour. Payday lenders are pushing hard to lure away customers from traditional banks. The effort is getting a boost from the industry’s loan crunch, especially for borrowers with blemished credit, and toughened regulation of fees and interest rates charged by the nation’s 7,700 banks and savings institutions.
Payday lenders say their interest rates are justified because the loans they make are unsecured and have high default rates. A spokesperson for Cash America International Inc., the nation’s largest publicly traded lender by revenue, says their company “has always been in the business of meeting the needs of consumers who have nowhere else to turn.’’ The consumers are desperate and cannot get a loan from a bank. The consumer is drowning in debt and they don’t care anymore about their impossible credit problems. Give me the money and charge me whatever you want, I owe everyone anyway. Americans are drowning in debt and they’ve given up caring. Lets live day to day. How sad.