The Importance of Payday Loans

When it comes to catering to the needs of many who are in serious need of a quick cash infusion days before receiving their next pay, nothing is perhaps more valuable than payday loans. However, the sad thing is that payday loans have been getting a lot of flack from staunch protesters who consider it an improper way to help people who are in need.

It is for this reason that this post is written. With so many misconceptions hurled at payday loans and the criticisms pertaining to regulation of the enterprise, it is worthwhile to assess the real value and benefit of payday loans as opposed to other means of securing extra cash in the interim.

The first question against payday loans is that the charges or interests are significantly higher when taken as a percentage of the loaned amount. The immediate answer to this concern is that this paints an incomplete picture of the situation. Firstly, lenders actually take on a lot of the risks associated with the enterprise and the fees are well within what is expected in order to recover the losses. Second, the charges are well regulated in most countries and jurisdictions and approved by financial institutions in-charge of policing such activities. In most cases, the best payday loan companies operating well within government regulations and are there to provide financial relief to those in need for what amounts as meager charges in the short-term.

More to the argument, payday loans actually offer a much better way for financial assistance. Studies have shown that those who availed of the services from loan companies are likely to have turned to loan sharks or illegal lenders if not for payday loan companies. The typical demographics of payday loan companies – those that are or barely above the minimum wage line – significantly benefit from regulated ventures rather than borrowing from individuals and institutions that are not duly registered and charge very high rates. In essence, the option is more a lifeline when the income gets squeezed out and there are no arguments to negate that benefit.

All in all, payday loans are legal and regulated means for people to gain extra cash until the check arrives. As long as it is used in the proper context and is properly paid when the salary comes, there is absolutely no value in contesting its benefit. In fact, without it, more people would be left with nothing to cling on to for emergencies and daily expenses. Therein lies the strength of payday loans and it is well worth recognizing that the world is a much better place with it than without it.

Previous post:

Next post: