what is payday loans? are they always ethical? why or why not? explain. what is usury?

Expert Solution

Payday loans are those loans when postdated cheque are issued to lenders and cash is received at the present using the salary.

It is a type of unsecured loans with high interest and those employees who are working in some company are in immediate need of the cash then, they are going to discount their future earning and they will be borrowing by writing a post dated cheque.

payday loans are not always ethical because these are leading into unnecessary trapping of the borrowers into a debt cycle and it will also mean that there will be a very high rate of interest which will be charged upon payday loans.

Usury is a practice of making unethical loans by the landers to the borrower's which are exploiting the interest of the borrowers and only benefiting the lenders because lenders are issuing these loans at a very high rate of interest which are not justified and which are mainly issued with a view to exploit the interest and the condition of the borrower by taking optimum advantage of it.

jeff jeffy answered 2 years ago

the imploications of payday loans on theories for policy design

Payday Loans. As you saw, the interest rates on these loans can be extremely high and are...

Payday Loans. As you saw, the interest rates on these loans can be extremely high and are even called predatory by some. Do you think such high interest loans are ethical? Why or why not?

Valué the ethics of the banks assisting in collection of the payday loans

Payday loans (Links to an external site.), a cash advance on aperson’s paycheck, are a...

Payday loans (Links to an external site.), a cash advance on a person’s paycheck, are a form of credit that only require income and a bank account. The borrower typically agrees to pay a fee, which acts like an interest rate, to the lender and is required to repay the loan at the time of his or her next paycheck. Recently, the government and private companies have added to the debate over payday loans.Part 1: The typical payday loan comes...

Describe the two (opposing) explanations of the cause of consumer use of PayDay loans, and the...

Describe the two (opposing) explanations of the cause of consumer use of PayDay loans, and the implications of these theories for policy design.

Does the payday loan industry suffer from asymmetric information, why or why not? Does the payday...

Does the payday loan industry suffer from asymmetric information, why or why not? Does the payday loan industry hurt the poor or provide a necessary service?

Historically, many cultural groups have outlawed usury, or the practice of levying interest on loans. Some...

Historically, many cultural groups have outlawed usury, or the practice of levying interest on loans. Some groups oppose usury because it exacerbates problems of income inequality (as wealthier individuals can afford to lend to poorer individuals), while others claim investment and loans should be made charitably. Evaluate these arguments against usury based on your knowledge of present value. Do such prohibitions make sense?

1. Payday loans are one of the most insidious business practices, and their customers seem to...

1. Payday loans are one of the most insidious business practices, and their customers seem to end up with a payday ball and chain around their neck that never seems to go away. This is because the interest and fees associated with these loans are so high that many people get trapped into taking one after the other over and over again. Rarely do payday loans end up being the short-term solution they claim. On the business front, there are...

Payday loans are high-interest short-term loans, usually over a period of two weeks. One recurring political...

Payday loans are high-interest short-term loans, usually over a period of two weeks. One recurring political question is whether or not interest rates on such loans should be capped. Roughly speaking, those in favor of caps want to protect consumers from potentially harmful loans, while those against caps want to let the free market determine what the rate should be. First, do you think there should be interest rate caps on payday loans or not? Defend your answer. Also, determine...

Access to Financing: PayDay loans are one form of financing that consumers can use when they...

Access to Financing: PayDay loans are one form of financing that consumers can use when they have insufficent cash to pay bills. Borrowers often can't access other methods of financing, because of a poor credit score (credit card) or lack of homeownership (home equity loans). States often have laws to limit the amount that PayDay lenders can charge for these short-term loans. For example, the state of Alabama has a law that limits the finance charge or interest rate to...

Question