Being in the payday loan business, you get the chance to hear many outrageous claims of people who obviously were victim to a very bad deal. They go as far as to post videos and blogs about how we are “modern day loan sharks”. Some have went as far as comparing our business to the mafia. Although it is funny to see those people do their best Marlon Brando imitation when referring to our industry, we have to see the bigger picture. People have been misguided, misinformed and possibly even taken advantage of. Today, I’m writing this blog hoping to shed some light onto the situation.
It’s true that when reading the fine print to your payday loan, you may find that an Annual Percentage Rate (APR) may show some extremely high number. In some cases, it may read as high as 400%. Remember though, the “A” in APR means yearly. You must remember that the payday loan you are applying for is typically a short-term loan. At Spotya! we offer loans from $100 up to $1000. We set our rates to 15%, while most others set their rates a little bit higher. Certainly, it would be ridiculous to stretch that amount to a whole year. Generally, these are loans that are designed to get you through until your next payday. Most people get paid every 2 weeks and that’s typically when our customers pay their small, short-term loan back. Bottom line, this is not a bank loan. You don’t see the “400%” APR because you pay your loan back the next time you get paid.
