Discussion on Loan Interest Rates

Interest on payday loans 

Payday loans involve a short-term loan which paid back with high interest. A payday interest varies regarding the borrower's credit profile and the amount of income they earn. Often, payday loans are short-term but of a high-interest rate of returns. To qualify for a payday, the borrower must provide his or her paystubs from their current employer. I believe payday loans are predators to any borrower due to their excessive interest rates, especially to individuals that earn more income. 

Should Christians charge interest on poor people on loans? 

Overall, I believe Christians can charge interest on poor people. A Christian who works for a loan lending company to financially challenged individuals has to comply with the employer's set policies, rules, and regulations. A poor person who chooses to borrow loans with such a company, despite the loan being processed by a Christian agent, is subject to paying the loan back with interest. Contrary, a Christian who runs a money lending business should not charge poor people's interests. A Christian should act as an example through helping the poor, including financial support. Hence, a poor person who approaches a Christian person personally and no at the work premises needs to be helped by such a Christian without asking for interests according to the scripture's teaching in Leviticus 25:35-37. 

Microloans interest review 

Microloans comprise of small loans which a person lends the other. They are borrowed from banks and credit unions. Since issuing another individual a loan is riskier, microloans charge higher interests upon returning within the agreed period. Microloan lenders conduct a background check of the borrower to determine how safe their investments are before investing in lending them money. Microloans investment resulting in high yields compared to traditional investments (Dubina, Kang & Suh, 2019). For instance, a microloan lender charges individuals who have remarkable credit scores slightly higher, resulting in high-interest returns. 

References 

Dubina, N., Kang, D., & Suh, A. (2019). Credit Scoring for Micro-Loans.  arXiv preprint arXiv:1905.03946 .