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Loan interest is based on risk. People who have money present the least amount of risk and get the lowest interest rates. People who need money the most present the most risk. If interest rates are limited to the rich man's rate, then poor people are going to do without and that means they will never manage to get seed money to start businesses of their own and get out of poverty.
Peer to peer microloans at Kiva, Grameen and other outfits are extremely high risk, given to people in the third world who have nothing to offer as collateral but their dreams. The interest rate is 16%. Loans are paid back in under two years and the small amount of the loan ($500 to about $2500 US) doesn't keep them in debt. Businesses prosper and so do the people who own them. Drop the interest below what it takes to do the paperwork and you'll dry these loans up.
Likewise, the original 18% interest on credit cards was reasonable. That February 2 weeks in Aruba would have been paid back over a year and the credit card company made money on the interest on the balance carried over.
However, nobody needs an interest rate over 25%. If a loan is that risky, it should never have been issued.
Usury laws are a good thing. However, make the rate too low and you'll hurt the very people you want to protect.
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