“These loans can be appealing to those with poor or limited credit histories, yet they carry inherent risks,” says Anita Mukherjee, a professor at the Wisconsin School of Business. “Specifically, they often come with significantly higher interest rates and fees due to the increased risk lenders assume by not checking credit. The allure of accessibility should be carefully weighed against these loans’ short repayment terms, which can make monthly payments more challenging.”
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