As I've mentioned beore, the payday loan industry has seen steady growth over the last 20 years. There are many reasons this is happening and I could dedicate an entire post to them but I'd like to focus in on perhaps the biggest reason: Dissatisfaction with traditional lending practices.
In a survey I read, the only thing that beat paydayloans in customer satisfaction was overdraft protection. The same survey showed that they were actually more popular than home equity loans, credit cards, or bank/credit union loans....now granted, these are two very different types of loans but still...more and more people are turning to cash advances when they need financial assistance.
Donald Morgan, economist for the Federal Reserve Bank of New York, argues that government bans on payday loans lead to more people bouncing checks, filing for bankruptcy and fighting with collectors.
He sites a great success story as an example. In 2003, Hawaii eased their payday loan limits. This resulted in a sharp decrease in the amount of problems with borrowers and lenders in that state. Most consumers were able to get their loan resolved in a month instead of several months. The state of Hawaii has also enjoyed a decline in bankruptcy filings.
Interest rates on overdrafts charged by credit unions and banks and exceed 2000%....that's worse than even those bogus interest rate numbers people like to throw around when criticizing payday and title loans.
To be completely frank, the demand and lasting influence and power of the payday and title loan industry really speaks for itself.
If you're in the market for a this kind of loan, www.PayCheckATM.com is a great place so start. They're linked up with hundreds of respectable lenders across the nation.
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4 years ago
2 comments:
You seem to know a lot about the payday loan industry and sites like paycheckatm.com, what kind of people use this service and is it only people with bad credit? Is it safe? Will it hurt or help my credit? This information is for a friend of mine (wink, wink).
hmmmm. good question, Jonas. i'm tempted to say no. i did some researching about yahoo answers, and everyone says that it might actually help your credit, provided you pay the loan back on time.
this sounds like good fodder for a post. i'll see if i can get a post about this topic tomorrow or Friday.
thanks!
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