Payday loans criticism?
Hi I have recently seen a rise in payday loans in the UK (an import for the US). If you look at the APR these loans charge they are crazy. How come these companies get away with this and why does the FSA regulate against it.
It seems to me almost like loan shark lending – as people who take these loans are getting ripped off and if they cant really afford to take out a loan then these payday companies shouldn’t be really allowed to give them. It reminds me (on a much smaller scale) of the sub prime mortgage loans they giving out in 2006 – loans which helped to start the 2008 financial crisis.
I agree that no-one forces these people to take out these loans, but at the same time I think it is irresponsible lending – something which helped fuel the credit bubble.