Reply to the below post in 200 words. The reply must include at least 2 scholarly sources (published within the last 5 years) in addition to the course textbook (attached) and relevant biblical integration. All citations and references must be in the current APA format. Do not repeat the same sources as the original post; use the text or Biblical integration.
Payday loans are unsecured, small-denomination, short-term loans. To be eligible to borrow a payday loan, an individual must have an active checking account and be employed. There is no minimum credit requirement to apply for a loan (Ramirez, 2019). I do not consider the interest rate, usually 390 to 780 % APR (How Payday Loans Work , n.d.) to be fair and feasible for borrowers to pay on time. They pray for consumers who cannot get credit anywhere else, need money immediately, and cannot get a regular bank loan because of bad credit. Eighteen states and Washington, DC, have strong laws prohibiting payday loans or setting low-interest limits (How Well Does Your State Protect Payday Loan Borrowers?, 2022).
The consumer financial protection Bureau rule prevented lenders from trying to collect payments from people’s accounts in ways that might accumulate excessive fees or deviate from what they expect (Consumer Financial Protection Bureau, n.d.). Microcredit is a subset of microfinance and is defined as the provision of small loans to individuals to promote economic empowerment (Kandie, 2022). The average interest loan for a microloan is an 8 % interest rate (Microlending FAQ, n.d.). This type of credit can help a small business that needs capital for investment. The difference between both is that non-profit institutions offer microcredit, and payday loans are offered by payday lenders (The differences between microloans and payday loans , n.d.).
Biblical Reference
Deuteronomy 15: 8 reads, “Instead you shall freely open your hand and generously lend what suffices to meet that need” (Senior, 2010). By lending what the needy might need, we could save someone’s life and feel better about ourselves. Suppose we lend something. We do not have to take this opportunity to abuse our power. We can simply lend at a fair rate and be feasible to pay back by the borrower.
References
Consumer Financial Protection Bureau. (n.d.). Retrieved from www.consumerfinance.gov: https://www.consumerfinance.gov/payday-rule/
How Payday Loans Work . (n.d.). Retrieved from paydayloaninfo.org/: https://paydayloaninfo.org/how-payday-loans-work/
How Well Does Your State Protect Payday Loan Borrowers? (2022, July 26). Retrieved from www.pewtrusts.org/: https://www.pewtrusts.org/en/research-and-analysis/data-visualizations/2022/how-well-does-your-state-protect-payday-loan-borrowers
Kandie, D. &. (2022). A new era of microfinance: The digital microcredit and its impact on poverty. Journal of International Development, 469-492.
Microlending FAQ. (n.d.). Retrieved from cameonetwork.org: https://cameonetwork.org/about-micro-business/microlending-2/microlending-faq/
Ramirez, S. R. (2019). Payday-loan bans: Evidence of indirect effect on supply. Empirical Economics, 1011-1037.
Senior, D. (2010). The Catholic Study Bible. New York: Oxford University Press.
The differences between microloans and payday loans . (n.d.). Retrieved from mycreditsummit.com/: https://mycreditsummit.com/microloans-vs-payday-loans.html
