Comment of the Day
October 28, 2009 | Uncategorized | Comments (0)The significance of the APR is proportional to the term of a loan. For a 30-year home loan at 6% APR, adding one percent to the APR increases the total cost by over 20%, whereas with a two-week payday loan at 400% APR, adding one percent to the APR increases the total cost by less than a quarter of a percent.
APR caps are unscientific, eliminate short-term loans from the marketplace, and hurt consumers who only qualify for short-term loans by cutting off their access to credit, even in emergencies, or driving them to the dangerous black market.
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