Post #4086598
2026-07-25 10:43 UTC
It may strike you as weird, but lenders *love* lending to poor people who will have trouble paying them back Obviously, lenders want to be repaid, and the more money you have, the easier it is to settle your debts, but (paradoxically) if you have a lot of money, you expect to pay *less* to borrow.
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@pluralistic@mamot.fr 2026-07-25 10:44
In other words: because poor people have a higher likelihood of defaulting, their loans come with higher interest rates and worse terms. Debt is steeply regressive: the less money you have, the more you're expected to pay. The industry term for this is the "risk premium": the riskier a loan is, the more it costs the borrower. 2/