Banking the unbanked
A lack of access to lending and banking lead people to use predatory lenders. Payday loans promise to provide money to address problems needing attention in the immediate term—an impounded car, a bond for release from jail, a mortgage near to foreclosure.
The loans are expensive to the borrower, and to the lender too—it's thought that 25% of principal is lost to default. The right to collect on those defaulted loans is then sold to collection agencies, which enjoy a largely deserved reputation for being nasty and abusive.
Loans paid back on time are likewise not subjected to treatment that could be considered fair or equitable. Rates of interest range from 50% to over 3000% annualized, with some lenders treating each ...
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