What is a characteristic of payday loan lenders?

Payday loan lenders are known for charging extremely high fees that, when converted into annual percentage rates (APRs), can exceed 200% or even higher. This characteristic highlights the predatory nature of payday loans, where borrowers often find themselves paying back much more than the initial amount borrowed due to these exorbitant fees. Such high-interest rates are a significant risk for consumers, leading to cycles of debt as borrowers may need to take out additional loans to cover the costs of the previous ones.

The other choices refer to aspects that do not typically align with the practices of payday lenders. For instance, low annual interest rates are not a hallmark of their lending model, as their appeal often lies in quick access to cash rather than affordability. Similarly, payday loans are generally designed for short-term use, often requiring repayment within a few weeks rather than extending long-term loan terms. Lastly, payday lenders usually do not require extensive credit histories, which allows them to target individuals who may have poor credit or no access to traditional banking services. This combination of high fees and lack of rigorous credit checks illustrates the unique and often problematic nature of payday lending.