Replies to post #65666 on Flexpower Inc. (FLXP)

[itlogic]

I thought that was just a cap and the lender still had some leaway in the rates they charge below or up to that cap? I'm not completely up to speed on the whole lending thing, but if what you say is true, then all lenders would have the same rate. Other than insentives, there would be nothing to make one lender more sellable than the other.

I always thought the prime was the rate that banks get money from the feds. Then, in return, the lender lends you money a little over prime. That would give them enough to pay back the feds and put a little extra in their pockets. Does the prime rate even apply to pay day loans since they are not dealing with a bank?

[ratso1]

Here's a link of a study of payday loan companies that was done in Texas:

http://www.consumersunion.org/pdf/paydayloans2.pdf

The information is somewhat dated (1999), but it looks as though there are a range of fees, from a low of $20/hundred up to $40/hundred. Most charge $33/hundred.

Someone posted earlier today that these APR's are not outrageous, but, from my perspective, a $66 fee for a $200 loan for just two weeks is absolutely sinful. JMHO.

I never looked into this side of the business until the question was brought up, so this is a eye-opener for me.