| Home | Free Articles for Your Site | Submit an Article | Advertise | Link to Us | Search | Contact Us |
This site is an archive of old articles

    SEARCH ARTICLES


vertical line

Article Surfing Archive


Payday Loans Provide a Necessary Service! - Articles Surfing

I think Payday Loans are both necessary and provide a valuable service regardless of the perceived problems of high charges, first lets clarify what Payday Loans provide, short-term cash advances until the next payday.

The typical charges for this type of loan are of the order of $15-$20 per hundred dollars borrowed so if you took a $250 loan the charge could be as much as $50 for a 30 day loan, this is equal to 240% APR, with such high rates one has to ask why is this industry growing so rapidly.

The answer is that it is providing a service that is required, at a price that the consumers can afford; the actual APR is of no great interest to the customer their only concern is can I afford to repay the loan on my next payday.

Think of it from the client's point of view, why do they use Payday Loans, I believe the answer falls into two parts

One. Because it is fast and convenient.

Two Because they probably cannot get credit in any other way.

For a borrower with a poor credit history Payday Loans offer a cash lifeline when it is most needed, to pay those unexpected bill or to prevent repossession of an item that has been bought on credit for example.

Problems only arise when clients are unable to repay loans but surely this applies to all forms of credit not just Payday Loans.

All the above not withstanding one still has to ask, are the high charges applicable to Payday Loans justified?

I think they are, first because payday lending is usually dealing with high-risk clients with a poor or no credit history. Second the costs of issuing a Payday Loan are much the same as issuing a much larger loan over a longer period, but these costs have to be recovered in a much shorter timescale with a Payday Loan hence the need for higher charges.

To summarise, Payday Loans provide a service that is in high demand by clients who can generally be considered high risk from credit point of view and the charges reflect the costs involved. If there were no need for the service, in a free marketplace it would cease to exist but until alternative sources of finance are available to them people will continue to use Payday Loans regardless of the charges and other apparent disadvantages.

Roger Overanout

Submitted by:

Roger Overanout

Roger Overanout

For further vital information and views about Payday Loans pay a visit to www.paydayloancenter.info.

You may reproduce this article provided you maintain an active link back to www.paydayloancenter.info.


        RELATED SITES



https://articlesurfing.org/business_and_finance/payday_loans_provide_a_necessary_service.html

Copyright © 1995 - 2024 Photius Coutsoukis (All Rights Reserved).

ARTICLE CATEGORIES

Aging
Arts and Crafts
Auto and Trucks
Automotive
Business
Business and Finance
Cancer Survival
Career
Classifieds
Computers and Internet
Computers and Technology
Cooking
Culture
Education
Education #2
Entertainment
Etiquette
Family
Finances
Food and Drink
Food and Drink B
Gadgets and Gizmos
Gardening
Health
Hobbies
Home Improvement
Home Management
Humor
Internet
Jobs
Kids and Teens
Learning Languages
Leadership
Legal
Legal B
Marketing
Marketing B
Medical Business
Medicines and Remedies
Music and Movies
Online Business
Opinions
Parenting
Parenting B
Pets
Pets and Animals
Poetry
Politics
Politics and Government
Real Estate
Recreation
Recreation and Sports
Science
Self Help
Self Improvement
Short Stories
Site Promotion
Society
Sports
Travel and Leisure
Travel Part B
Web Development
Wellness, Fitness and Diet
World Affairs
Writing
Writing B