MEMPHIS, Tenn. — On Live at 9 this morning, WREG told you about a report showing that Memphis is No. 1 in the nation for payday loans.

Jake Hill, from the company DebtHammer, spoke to us about these loans and how they affect average people. Tennessee state law says that APR interest maximum is 460% on a 14-day loan of $100.

Hill noted Memphis and the South in general as having a few problems: an underbanked population, lack of access to credit for the underbanked, and gambling.

“When you misinform borrowers, you’re going to have higher default rates. They’re going to pay more for those loans.” Hill said. “When you educate borrowers for microfinance, no matter their income level, you actually see a much higher repayment rate.”

Hill said that regardless, people who do not have access to credit still need credit. He cites concerns over fees as a reason for many people to avoid banking in traditional banks and not building credit.

Hill said that not all loans are bad, but there are better ways to do it. He noted that online lending is still in a “Wild West” phase, charging interest at an “700% average.”