Payday Lenders Have Extremely Low Costs
MYTH #2Cash Advance lenders could offer customers a much lower interest rate and still make money. |
FACTCapping the APR at 36%, as has been suggested by various critics of cash advances, would all but extinguish our ability to operate as a business. |
Businesses have to pay for many different expenses to remain operational, including rent, utilities and wages. With lower fees, we would not be able to meet those obligations. An APR of 36% would mean a fee of under $1.40 per $100 borrowed. Lending out money for a flat fee of 10 cents a day is an unsustainable business model for anyone, whether a cash advance lender, credit union, or bank. It would effectively outlaw cash advances. Compared to the alternatives, we believe our customers understand the benefit and appropriateness of the one-time fee.
