Answer to Question #113962 in Economics for Yarit

Question

https://www.chamberofcommerce.org/payday-loan-statistics

Are payday loans easy cash or a bad bargain?? Explain the answer with evidence from the website.

Answer 1

While payday loans might seem like a quick fix when one is in need of some emergency cash, there is the heavy back-end burden that can be overwhelming for most payday borrowers, because the users of payday lending often get caught in loan borrowing sequences spanning ten loans or more, and as a result spend a lot of money for repaying loan interest. So, payday loans is a bad bargain, if people use them very often.