“So many of the people making the decisions do not ever need a payday loan and don’t understand that you work out the percentage interest rate and isn’t it terrible that you paid $50 to borrow $400? “
No, it would not. I have never used a payday loan, but it appears that they more typically would have a customer pay $400-500 for that $400 loan for using the money for only a month. That’s over 1000% APR. It is ridiculous and should be illegal.
Nonsense. Have you ever been to a pawn shop?
Within reason, if people know what the interest rate is, then it's up to them whether to agree to a contract or not. There is plenty of competition in the payday loan game, so people are free to shop around for an interest rate they can live with.
One of the reasons that interest rates are high on this type of loan is probably because of high default rates.
In any event, are you advocating a situation where such a loan would not be available at all, and be illegal?
I have a great idea: how about letting the consumer decide that, instead of you?
Did you miss the part about how this type of loan doesn't product a lot of consumer complaints? Maybe the reason for is that people know exactly what they're getting into when they acquire such a loan.
At least payday loans don't present the opportunity to commit theft of property via outright fraud, which seems to happen with mortgage lenders on a basis more frequent than many are willing to admit.
That is the type of criminal activity which merits aggressive legal action, rather than pre-emptively banning a loan with an interest rate which you think is "ridiculous".
1. A $400 loan with a 500% interest rate.
2. An interest rate of 10% established by law, and nobody willing to lend at that rate.