Did you know that high interest loans, like payday loans are typically doing more harm than good for American Borrowers? Many of these loans have annual percentage rates equivalent to 350% ! Low income families who don’t meet requirements for a conventionally backed bank loan or home equity line of credit are forced to take these loans when crisis arise. 90% of Payday loans are taken by households averaging five or more of these transactions a year. At these interest rates and these frequencies, people are better off borrowing money from the mob or a loan shark!

Former Google CIO and VP of engineering Douglas Merrill has been fighting to reform high-cost Payday loans and bring reason to the American borrower. Read this statement from Merrill below and hear what he thinks about the situation:

“We believe all data should be credit data,” says Douglas Merrill, Founder and CEO of ZestCash. “By using ‘big data’ analytical techniques we are able to offer a fair, lower cost alternative to people who do not have access to traditional credit.”

The data-based underwriting Merrill refers to above takes more comprehensive factors into account when lending money and these loans actually help consumers credit situation.

ZestCash is offering Americans better loans based on Merrill’s beliefs. His company is lending borrowers between $300- $800 under more acceptable terms than previously offered to low-credit clients. ZestCash customers pick the amount, then adjust the duration accordingly to what small weekly payments they can afford, rather than lump sum payments like Payday loans requires. The result is more than 2/3 of the customers return to use the service again.

The company just announced that they have raised another $73 million to keep the ball rolling on these types of ventures. Reports from ZestCash say most customers are using the loans for unplanned auto expenses, medical bills, and other emerging household emergencies.