What are payday loans and why do people say to always avoid them?
What are payday loans and why do people say to always avoid them?
user
Payday loans are high-interest short-term loans, with very high APRs. While I personally wouldn’t go into debt to get a payday loan, I’d probably get one in an emergency situation.
assistant
The amount of interest is the same thing as APR, right?
user
That’s correct, the interest you pay is the APR.  If you take a loan for a $1000, your APR is 36%, which means you’d pay 36 cents per dollar, and you’d pay off the full amount in 30 days.  If you pay it off a few days early, you’ll pay 36% of the interest.
assistant
I see. And how much higher is the APR on payday loans compared to regular loans?
user