Americans Turn to Cash Advances in the Struggling Economy
As consumers try to survive the recession, more and more are turning to cash advances to supplement their income and pay bills. Quick and simple, these convenient loans are being used to assist with the payment of unexpected bills and increasing debts.
Applying for a Convenient Loan
Loan companies have assisted the consumers by simplifying their application process, making it easier to apply and qualify for the loan. Consumers who are over the age of 18, have a job and a current active bank account can apply and qualify for the fast loans. The lender will examine the application, make an approval decision and determine how much money the applicant is eligible to borrow. Funds can be made available within 48 hours of the loan approval. It is being estimated that the US citizens will not see an improvement in their economy for at least a year, and the straining economy has caused a need for government bailout which has limited the normal lenders in the US.
Struggling US Banks
In 2008, the US banks began showing signs of struggle within the country’s economy. Although in 2009 the US banks have begun to show profits gaining, analysts advise that the banks increasing profits do not prove that the US economy is completely out of its recession. The banks have improved since the bailout, however; that does not mean that they are not still suffering from smaller losses, which have been experienced throughout the months. Despite their improvements, the US banks are still not operating at the levels they were in previous years.
Analysts warn that although the banks are improving with revenue increasing more than expenses, the US banks still have issues from the past that must be dealt with. The lending practices of many banks are one reason the banks fell into hard times. Lenders were approving loans for almost anyone who applied without checking the applicants properly. Unwise lending was becoming more and more popular and is believed to be a large contributor to the recession experienced in the US. Banks hope that the bailout they received, in addition to interest rates, will allow them to completely turnaround their struggling situation, giving them the opportunity to start fresh.
How Fast Loan Lenders Benefit?
The US banks have shortened lists of qualified borrowers, which have led to an increase in business for cash advance loan companies. Due to the structure of their loans, this type of lender still remains able to extend money. Individuals needing loans that were turned down by conventional banks are finding approval from these loan companies. A simple application process, willingness to lend, and the structure of their loans is what allow this type of lender to extend monies to those individuals who find themselves in need of a loan.
Foreclosure Still on the Rise
Decreased business activity and an increase in unemployment continue to push borrowers into default. Many banks have put a stop on foreclosures, pending the results of the government bailout and how it would affect the market. Once banks begin sorting out the questionable loan customers, a decrease in their profits may once again begin to rise. It is difficult to estimate the number of defaulted homes that may occur in the future. With employment being difficult to find in many regions of the US, foreclosure will still occur as consumers make difficult choices pertaining to their financial state. Conventional lenders are being careful about who they choose to lend to. Many Americans have turned to and will continue to turn to the quick loan lenders, rather than the banks, to apply for loans. These loan companies are in a better position to extend funds, which helps the consumers.
Cash advance loan companies are becoming more popular as the US banks and economy continue to struggle. Fast and simple, this kind of loan looks good to consumers. The application process for these quick loans is simple and convenient, unlike the process taken by traditional financial institutions. The structure of these loans makes it easier for these lenders to extend money to those in need. US banks are making it more difficult for Americans to borrow money, and Americans find themselves turning to this type of Loan Company to supplement their income when times are tough.