By Cory Doctorow (GPG 0xBF3D9110957E5F4C) @doctorow.pluralistic.net · 25/07/2026Why loan $1m to Elon Musk at 0.5% interest when you can make 10,000 $100 payday loans to non-union Tesla workers on food stamps at 1,000% interest? Obviously, the fly in the ointment here is the *risK* in "risk premium." 5/ 1424
By Cory Doctorow (GPG 0xBF3D9110957E5F4C) @doctorow.pluralistic.net · 25/07/2026The reason the risk premium exists is that poor borrowers have a harder time paying their loans. That can be good, up to a point: if you're Klarna and you're originating loans to people Chipotle lunches on the installment plan, you *want* your borrowers to miss several payments. 6/ 1271
By Cory Doctorow (GPG 0xBF3D9110957E5F4C) @doctorow.pluralistic.net · 25/07/2026Klarna loans are free if you pay them back on time, but if you miss a payment, you're hit with a huge penalty charge and sky-high interest (on top of the principle *and* the penalty). On a small purchase, penalties and interest can quickly add up to a triple-digit APR. 7/ 1303
