Payday loans are designed to make a profit for the business that offers these lending options
The student must also reply to one classmate’s thread and the reply must be at least 150 words with at least 1 citation in current APA format.
In my opinion, payday loans are designed to make a profit for the business that offers these lending options. The interest rates applied to the payday loans are entirely too high with a lesser opportunity for borrowers to successfully repay the amount plus the interest. “A rational borrower considering a payday loan would weigh the near-term benefit of having some extra cash against the cost of interest payments and potential defaults” (“Capping interest rates on payday loans leads to more debt and defaults; Daily chart,” 2020, para. 4). Unfortunately, the borrower overvalues the benefits they receive in the short run and undervalues the cost they will be required to pay back in the long run. Due to the inability to pay back the payday loan including the applied interest, many lenders find more borrowers defaulting on their loan obligations, which can cause long-term consequences for the borrower. Should the borrower try to take out another loan, they may be subjected to higher interest rates due to their debt history and would be classified as a risky borrower.
As a Christian, I strongly believe that one should not charge any poor person interest on loans. If the Lord was able to supply us to be a blessing for someone else, then we must not expect anything in return. “Whoever is kind to the poor lends to the Lord, and he will reward them for what they have done” (Proverbs 19:17, NIV). We must understand our good deeds are a direct reflection of ourselves being more like Jesus. We must not boast nor be prideful of our actions but given wholeheartedly for the goodness of the Lord. “For God so loved the world that he gave his one and only Son, that whoever believes in him shall not perish but have eternal life” (John 3:16, NIV).
Reference
Capping interest rates on payday loans lead to more debt and defaults; Daily chart. (2020, February 17). The Economist. Retrieved July 27, 2020, from https://link-gale-com.ezproxy.liberty.edu/apps/doc/A624423567/BIC?u=vic_liberty&sid=BIC&xid=a1b8b740
Answer preview to payday loans are designed to make a profit for the business that offers these lending options
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180 words