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To any person with a credit score of 700 or above, pay day loans may seem like little more than highway robbery. And, when all things are considered, online pay day loan companies do charge hefty fees for the services they provide. But the question that begs to be answered is this: Do pay day loan companies offer a legitimate service that people actually need or are they merely preying upon people with nowhere left to turn for credit options?

Generally speaking, a pay day loan place charges roughly $15-20 on every $100 you borrow and asks that the money be repaid in two weeks or less. If you converted that into an APR, it would probably exceed 200% at most of these pay day loan companies. Without a doubt, this does make any credit card look like a great option in comparison. But still'is this a viable service?

In fact, online pay day loan companies are providing a much needed service for a segment of the population that has limited options due to poor or non-existent credit. So for people who have had an unexpected auto repair, such pay day loan companies do not charge unreasonable fees when you take a minute to look at the alternatives.

For a person who has had their car suddenly breakdown on them, the choice is simple: either get the car fixed by securing an online pay day loan or lose their job because they don't have a reliable way into work each day. Yes, the person will have to pay roughly $50 to borrow $250 for two weeks, but does that c-note compare to the lost wages and financial hardship that would be suffered should they lose their job? When you think about it in these terms and remember that these pay day loan companies are the last and only option for some, it is clear that they are indeed providing a legitimate service.

The same scenario basically applies if you get a utility shut off. Even if a person were willing to do without the utility until their next pay day, the penalties charged for being disconnected along with the fees assessed for turning the service back on will almost certainly exceed $50. Again, while the fees do appear unreasonable to people with credit cards and other financing options, they are actually quite reasonable when you consider the consequences of not getting the loan.

So for the person using a pay day loan service, there are two basic benefits: convenience and access to much needed financial assistance in times of crisis that would be otherwise unavailable to them. Now of course there will always be people who abuse this service and take out loans for silly things that could wait until their next paycheck. But for the vast majority of people using a online pay day loan service, the access to emergency funds'even at elevated interest rates'is absolutely vital. The consequences of not having this access can cost people their jobs and generally create hardships that could otherwise be avoided.