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I gather that the default rate for payday loans is several percent per month, so you'd lose money charging 30% APR (2.2% / month).

Can anyone point to a good article on how the industry works and who their customers are?



Here are a few articles I've read that you might find interesting. The first is NPR's brief look into the payday loan business as a whole and the second demonstrates the wild rate at which these loans are being issued (£1.2 billion issued in 2009 and estimates of £3.5 billion by 2014).

http://www.npr.org/templates/story/story.php?storyId=1272205...

http://www.google.com/hostednews/ukpress/article/ALeqM5h5YQz...


I don't have a link, but Planet Money did a great podcast on payday loans.




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