Loans.org: Imagine If Everything Were Priced Like a Payday Loan
By Isaac Juarez
July 25, 2013
The law requires payday loan costs to be expressed in yearly terms, even though they only have average lifetimes of two weeks. This yearly cost is referred to as a payday loan’s annual percentage rate, or APR.
By forcing lenders to price payday loans based on their APR, consumers looking to borrow a payday loan often have trouble accurately understanding how much interest they will really pay after a normal 14-day term.
If everything were priced like payday loans, everyone would have difficulty finding out the true cost of anything.
For instance, imagine if you tried to park your car and the parking meter said it would cost you $17,520 to park for one year instead of saying it would be $2 per hour.
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