Payday loans aren't alone in this. All loans require you to pay back more than you borrowed. Payday loans are just shorter term, which makes the loan fee seem like a terrible amount. When you figure the lender's cost of doing business (rent, utilities, etc.), you see that it's not that much. It's a way for a poor person to get a new tire for their car that they need for work, when their payday hasn't come yet.
Payday loans aren't alone in this. All loans require you to pay back more than you borrowed. Payday loans are just shorter term, which makes the loan fee seem like a terrible amount. When you figure the lender's cost of doing business (rent, utilities, etc.), you see that it's not that much. It's a way for a poor person to get a new tire for their car that they need for work, when their payday hasn't come yet.