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  Lets step back a bit.
  
  I do not want to defend pay-day loans, I hate the concept and ultimately they are best avoided.
  
  But think on this. We see these massive APRs banded around, indeed they have to quote them. But these loans are designed to be repaid within days, not a year or years so the APR is not an issue if used correctly. The problem occurs when people do not repay them and/or keep using them on a regular basis.
  
  If someone borrows £100 on Friday to tied them over with a view to repay to Monday and have to repay £5 as a fee. That seems fine, some might think 5% interest and it is certainly not a high cost. but we have to remember the money is borrowed for, say 3 days and the APR is an annualisation of that fee meant to cover a 3 day loan and that is how x0000% comes from. regardless of how many thousand % it is still just a fiver if repaid 3 days later.
  
  Is that £5 an unreasonable fee? I don't think so - there are fixed costs and overheads to administer the fee after all. A more reasonable APR of say 100% (!!!!) would work out at pennies for a 3 day loan and no-where near enough to cover those costs.
  
  As I say these loans are awful and are best avoided, even with just a £5 fee for a few days, but let us not exaggerate the problem and it certainly would not be ripping people off to charge a fiver to borrow £100 for 3 days.
  
  PS - I have never used one of these, will never use one and will never suggest to a client to do so. Hence I do not know the actual cost of borrowing £100 for 3 days and used the figure only to illustrate how the massive APRs can come about fro what really is a small fee.

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