The Payday Loans Debate Part 2
In the first article “Payday Loans | Will The Truth Please Step Forward” we had addressed the accusations against the payday loan industry in regards to high interest rates.
Now we are going to talk about another accusation that is typically aimed at the payday loans industry in order to discredit their reputable services. This issue is in regards to trapping consumers into a cycle of debt.
We as consumers make the wrong decisions that lead us into debt. No one else!
Opponents profess that because of the high interest rates, consumers are not able to pay back the loans they borrow from payday lenders thus incurring additional fees and penalties, which trap them into a never ending cycle of debt.
Although there is no doubt that consumers do get caught in cycles of debt, we need to ask why before we point fingers!
Payday loans lenders offer some great services but unfortunately, they do not balance consumers’ checkbooks. Only adults can apply for these loans so it would be fair to say that if an applicant misses or fails to make their payment according to the terms that they have agreed to, it would be their fault, not the industry’s.
Granted, there are some slime balls out there fixing to take advantage of unsuspecting consumers, but you will find this type of activity in any existing industry.
Many places that offer payday loans to consumers such as Personal Money Store, encourage their customers to exercise the responsible use of money. Spending some time on this blog will adequately prove this point.
Payday loans are not discriminatory, anyone can apply and are given the right to do so but are also asked to meet the terms and conditions of borrowing the loan.
The Payday Loan Industry has been accused of preying on the poor!
Payday Loans Prey on the Poor
Another accusation is that the payday loans industry preys on the poor. I guess that depends on what you consider poor. One of the criteria that the industry has when approving applicants for payday loans is that they have a job! The demographics show that the average applicant for a payday loan makes between thirty two and thirty eight thousand a year. That puts applicants on par with most of the American Middle class.
What may make the industry a little more vulnerable to criticism is the fact that loans are able to be given so quickly and with fewer qualification criteria than would be expected from a bank. So naturally, with a larger number of people who are applying under perhaps more desperate circumstances, there are bound to be those who end up not meeting their terms and are therefore penalized.
Keep in mind however that the payday loans industry is a thriving business and would not be so if it habitually took advantage of customers. One happy customer will tell another person whereas one unhappy customer will tell ten.
In Conclusion
Despite the unfair claims and bogus accusations made against the payday loans industry, I personally don’t believe there is good reason to place legislation against it. Leave the decision to the American consumer. They can say yes or no, and the industry will survive or die by their decisions.
Simply put, if you don’t like payday loans, don’t get one, and don’t be a lemming among the critics until you understand the issues.
Payday loans and Cash Advances are the right of every person to have access to. Imagine that your car was impounded and you had to come up with $500 today to get it out but payday wasn’t until next Friday.
That would be a horrible situation mainly because you probably know the impound lot is going to charge you an arm and a leg to get it out. If you have to wait a week or so how large is that bill going to be? Many people simply lose there car and the impound lot auctions it off to pay themselves.
In this situation would you want to be the one to tell a struggling single mother that she is not allowed to borrow a couple hundred now to avoid this horrible tragedy?