Payday lenders have the reputation in some circles as being
predatory. More specifically their reputation is that they target
the poor and offer them predatory loans akin to a loan shark. In
this article I will take this argument into consideration and see
if we can draw a conclusion as to weather or not this charge is
true.
Who Needs Payday Loans And Who Qualifies?
These are the first questions that need to be answered if we are going to solve this. First off payday loans are needed by those who find themselves in a sudden but temporary financial hardship. This may be the result of an illness in the family or an emergency car repair or home repair. Sometimes this can be due to an unexpected bill that needs to be paid comes in. If you are well off or middle class with a decent expendable income these types of situations may come up in life for you but in most cases you will have the funds to cover such events. Therefore most in the upper or middle class have no need for payday loans. easy online payday loans
In order to qualify for such loans one needs to have a checking account, be employed for at least the last 6 months prior to their application and also have an income of $1000 per month or more. There are no credit checks so past credit problems will not effect the borrower chances. Since the rich and middle class don't usually need this type of loan that only leaves the working class left. Financial problems have more of an impact on the working class than on others with a higher income. This is why these are the target groups of payday lenders.
Are Payday Lenders Predatory?
Let's explore this question. Payday Loans are the riskiest loans for a lender to grant. Due to the fact that there are no credit checks and that they are very easy to qualify for. There isn't much weeding out high risk applicants. Most applicants are relatively high risk. This is why the fees and interest are high over a long period of time. If you take a payday loan and it's due date is in 2 weeks and you pay it off in full by the time it's due your fees are typically from $10 to $30 per $100 borrowed. If you miss your payment date than the loan is renewed and the fees are tacked on to the new amount again. The more payment due dates you miss the more risk the lender is taking on getting their money back and the fees can snowball to quite a bit. You need to treat this type of loan with due diligence.
In my opinion these loan fees are not predatory and are regulated by state all over the US. The high fees are due to the high risks involved for the lender. If the bill is paid off in time than the fees are very reasonable considering the speed and convenience of such loans.
Who Needs Payday Loans And Who Qualifies?
These are the first questions that need to be answered if we are going to solve this. First off payday loans are needed by those who find themselves in a sudden but temporary financial hardship. This may be the result of an illness in the family or an emergency car repair or home repair. Sometimes this can be due to an unexpected bill that needs to be paid comes in. If you are well off or middle class with a decent expendable income these types of situations may come up in life for you but in most cases you will have the funds to cover such events. Therefore most in the upper or middle class have no need for payday loans. easy online payday loans
In order to qualify for such loans one needs to have a checking account, be employed for at least the last 6 months prior to their application and also have an income of $1000 per month or more. There are no credit checks so past credit problems will not effect the borrower chances. Since the rich and middle class don't usually need this type of loan that only leaves the working class left. Financial problems have more of an impact on the working class than on others with a higher income. This is why these are the target groups of payday lenders.
Are Payday Lenders Predatory?
Let's explore this question. Payday Loans are the riskiest loans for a lender to grant. Due to the fact that there are no credit checks and that they are very easy to qualify for. There isn't much weeding out high risk applicants. Most applicants are relatively high risk. This is why the fees and interest are high over a long period of time. If you take a payday loan and it's due date is in 2 weeks and you pay it off in full by the time it's due your fees are typically from $10 to $30 per $100 borrowed. If you miss your payment date than the loan is renewed and the fees are tacked on to the new amount again. The more payment due dates you miss the more risk the lender is taking on getting their money back and the fees can snowball to quite a bit. You need to treat this type of loan with due diligence.
In my opinion these loan fees are not predatory and are regulated by state all over the US. The high fees are due to the high risks involved for the lender. If the bill is paid off in time than the fees are very reasonable considering the speed and convenience of such loans.
