Payday loans are getting a lot of press from major news sources. Back in February, the New York Times took aim at payday loans. Recently, the Economist addressed this product in an article titled, “Payday lenders
Endangered sharks“. Not sure what they mean by “endangered shark” because the article says that more people are getting shut off from traditional credit. At the end of the article the author writes, “payday lenders will thrive, regardless of the conditions placed upon them.” Not sure what the author’s point is.
What I think is worth noting is that not everyone qualifies for a payday loan. Wonga, the largest payday lender in the UK claims that it rejects 62% of the applications it processes. If you look at Wonga’s site, it claims that 92% of it’s customer’s polled would recommend Wonga to a friend. They surveyed over 25,000 respondents.
The problem with regulation is that it usually backfires and harms the consumer by giving them fewer options. Only real competition can bring costs down.
