The payday loan industry receives quite a bit of negative press. The fact of the matter is, payday loans do come with a high interest rate and if you miss a payment you can end up having to pay quite a bit of money to the loan lending company. But when you have no money to pay your bills or to feed your family? What options do you have?
No one claims that payday advances or cash loans are perfect but they do serve a purpose. While they may not be the best solution for everyone, these types of short term loans definitely have helped people out of quite a few jams.
So let’s take a deeper look into payday loans. Why do some people feel they are bad?
Payday loans often needed by people with low incomes and a history of not being financially responsible. If they had a large salary or had been responsible with they money, they would not need a short term loan. Many law makers and government officials blame the loan lenders for the issues that payday loans cause. But never looks at how cash loans can help.
So are payday loans really that unfair?
As mentioned above, the people looking to get a payday loan are not financially responsible. Chances are they could not get approved for a loan from a bank and do not have good credit. If someone is looking for this type of loan they are on their last option. Yes, the interest rate on a short term loan is higher then the average but the people looking to get the loan are not qualified fo most loans. The banks who loan out to people with bad credit and a poor history of financial issues are taking a HUGE risk by loaning money to these people.
Payday loans have to work for everyone.
This is America and payday loans are not a charity. The business of loaning money has been around for centuries and the banks have to make money when they offer out loans. The fact of the matter is the loan lending companies who offer payday loans are taking a huge risk by loaning money out to people with a very low credit rating and a poor financial record. In order to make sure they do at least earn some profit on the loans they have to utilize a large internet rate. With a large amount of the loans defaulting, they need make sure they earn enough money to cover them.
No one is claiming payday loans are perfect, but for some people they are the best option. They also could be the only option available for people who need money now. If your kids do not have food at the table then you are willing to take the risk to make sure they can eay.