'Would you take out a loan that has an annual percentage rate of 391 percent? Yes, I know that sounds absolutely crazy, but millions of Americans do it every single year. The typical payday loan requires borrowers to pay about 15 dollars for every $100 that they borrow for two weeks.
That comes out to a yearly rate of about 391 percent. And the payday loan companies know exactly who to target. They have set up thousands of shops in the poorest communities all over the nation over the last several decades. Each year, approximately 12 million Americans take out payday loans and they pay approximately 7.4 billion dollars in interest and fees on those loans.
Sadly, once you get hooked on payday loans they are very hard to stop. In fact, one study found that only 13 percent of payday borrowers get two loans or less per year. All other borrowers take out more loans than that.'
