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The Critics and Costs of Payday Loans

When contemplating the question of whether a payday loan is a good deal or not it is vitally important to keep things in the proper perspective. There are a host of critics and do-gooder organizations that criticize the payday loan industry without the people from these organizations ever trying to walk in the shoes of those of us who may need or urgently require the assistance of these types of loans. These do-gooder organizations and critics often come from a rich background where they have never been in a position where they are without money or when they couldn't ask rich relatives for money when the need arose. These people the like to wag their finger at the pay-day loan industry, while they have never actually lived in the real world, with real problems, with children not able to have a full belly or risking having the electricity or heat being cut off because a temporary cash flow problem. For such critics it seems that the higher interest rate charged by the pay day loan industry is worse than having the heat cut off at home because I have yet to meet a payday loan critic that advocates going to the local loan shark where there is often the threat of physical violence.

It is indeed true that Payday loans have certainly developed into an issue in the present day. In essence, payday loans are the type of loan that is made for a short time to cover a short term cash flow problem. Usually these loans are sandwiched between two pay checks. Those frequent critics of course have no need for such loans typically hailing from the moneyed classes. The fact is that the advance is unsecured. There isn't a co-signer or a security deposit made, which means you can get a loan fast without that rich uncle the critics typically can rely on.

Furthermore, the decisive factor to receive this type of loan is not very difficult. All you need to do is to be above the age of eighteen and have a regularly paying job usually earning at least 375 every two weeks. Of course you also need to have a regular bank account and a debit card.

So, finally when we consider what the critics harp on when disparaging Payday loans it is vitally important to consider the source and alternatives. While it can be true when compared to traditional bank loans the interest is high, but what these critics often fail to remember that often consumers of Payday loans are not eligible to receive such loans and certainly couldn't receive such traditional lower interest rate loans in a short amount of time. So, when making a judgement about the relative good-deal of payday loans, one must remember that the Payday loan consumers often live in the real world without family backup, without rich friends, without a trust fund to call on. Subsequently when we consider that many consumers would face the real world of cut electricity, hunger, lack of heat, we must reassess whether the few extra dollars the consumers pay make them a good deal or not to them. It is clear when the full calculations are weighed objectively the higher interest rates can indeed be seen as a win-win solution for the wide array of people who through no fault of their own need to get a Payday loan.