Are Payday Loans Fair?

Posted on Saturday, May 15th, 2010 at 1:11 pm in Financial Planning, Miscellaneous Cash Loan Info

Well, the answer depends on the person’s point of view.  If we are talking about payday loan per se; if we are only basing things on the very core or idea of payday loan, we can firmly say that it is indeed fair.  However, if we are to base our answer on those who have bad experience while having cash advance through this kind of cash loan, we will surely have various responses.

Now to make things rational, let’s extract the simplest and most logical truth by focusing on payday loan itself and not on the opinions of others.  Is payday loan fair enough?  Let’s start with its principle.  First, payday loan is existing today not because someone insisted it to exist or be famous but because people need it.  If we take a look at the financial history of our people, we will know how strict cash loan is especially with the banks.  You are not allowed to have quick cash unless you have all their requirements and one of which is a good credit standing.  Let’s admit the sad reality though.  Not everyone can have good credit score because not everyone is financially stable.  So, the cycle lived on.  You are in need, you request for a loan but in the end you get denied.

Until payday loan came into play.  Its very purpose is to help aid people in times of crisis.  As the name connotes, it is meant to be paid the next payday.  To put it simply, this is a short term loan.  Its structure was made in such a way that it will be accessible to people.  Accessible in what way?  First, you no longer need to have perfect credit score just to avail cash loan.  Even if you have the worst standing, you will be entertained.  No discrimination; no false judgment.  Second, if you do not have a house of your own, you still can borrow.  Third, it is accessible because you need not endure the long hour of waiting in line just to talk to our bank.  With payday loan, you can get instant approval in just a click.  Yes, you read it right.  You go online and you’ll see what we’re referring to.  The advanced technology used by payday loan companies made it possible to secure all the personal data and information when you apply online.  Fair enough, isn’t it?

Now we go to fees.  Well, this is the most talked about issue.  The truth is you pay $25-$35 for every hundred dollar of quick cash.  Many critics say it is definitely unfair.  It’s like taking advantage of the crisis that others are into.  However, payday loan’s concept is not like that at all.  You see, for a short term loan, it’s hard on the part of the lender to give an APR like that of the bank loan.   Besides, you wouldn’t notice this APR unless you extend.

So is payday loan fair?  It is, it depends on the borrower.

Related posts:

1. Fair Payday Lending
2. Payday Loan Cash Amounts
3. Loans for People With Bad Credit