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Myth vs. Reality - Predatory Lending Association

Myth: It is unethical to charge a poor person 100 times the interest rate a rich person would pay.

Reality: We live in a free market society, if the working poor are willing to pay 100 times the interest rate a rich person would pay (e.g. 550% APR instead of 5.5% APR) there is clearly a market need for our service.

Myth: Debt traps are a bad thing.

Reality: Debt traps are the cornerstone of payday profitability. Although the 2 week term of a payday loan traps most people in debt, there are a few customers who are able to pay off the loan on time.

Myth: The government should regulate predatory payday lenders.

Reality: Although it is true that our government regulates some free market activities such as prostitution and drug abuse, payday lending is fundamentally different because it is a financial service.

Myth: Payday lending is comparable to selling yourself into slavery.

Reality: Although there is a market need for slavery, people do not choose to sell themselves into slavery. Free choice is the difference between payday lending and slavery.