For cash-strapped lower income families, the option of payday loans may seem a short term blessing to a pressing financial problem. Unfortunately this form of debt management which is anything but a blessing, can lead to long term debt problems and its targeted market, the underprivileged, African Americans and the military, provide the payday loan industry with a growing market.
The Cost of Payday Loans
Looked at in simple dollar terms, the cost of a payday loan, $15 to $30 for a $300 loan, may seem small, but compared to mainstream lending the rate is astronomical.
