The payday loan is a fast-growing industry in America and a
depressing one at that for many people. The generation with
which the payday loan is a big hit lives from paycheck to
paycheck and seems to never emerge from debt, in which they are
submerged to very great degrees.
In some cases, the amounts offered in a payday loan are merely a
few hundred dollars and the rate of interest an exorbitant 500%.
For instance, one borrows $200 then the amount to be repaid on
payday is $240 or 250. The lending companies are thriving on
this business venture; whereas, for millions of Americans, the
payday loan has become a way of life.
Between the years 2000-2003, the number of companies offering
payday loans has gone up to 20,000, not including the numerous
websites that offer such loans. The service sector of low-wage
workers has increased of late, leading to a boom in this
industry. This has become almost like an alternative banking
There are claims that these loans actually end up being cheaper
than actual banks because the charges for a bounced check range
from $60- 70 and the late fee is only $30. However, the rates of
interest are very high. For instance, they might take a fee of
15% to 30% on lending a hundred dollars. For someone with bad
credit, a payday loan comes as a saving grace, especially for
emergencies, because they can’t get loans at a short notice
The good thing that people find in payday loans is that no
questions are asked as to why they require the loan amount.
Also, there is no need for any credit rating. All that you need
is a proof of your employment, your previous salary stub, and a
checking account. This way, your application is processed within
a very short of filing it, especially online Within the space of
hours or minutes too, sometimes you can easily get the required
money in your account.
However, it is recommended strongly that
payday loans should not
be made a way of life and should be sought only when required.
Also, the amount that is borrowed should be what is required; no
excess amounts should be borrowed. You wouldn’t obviously like
paying interest for the money that sat idly in your account.