Online Payday Loans

Online Payday Loans


The payday loan industry is a wild one.  Over the years there has been a constant battle between the lenders and the borrowers. It seems borrowers don’t want to pay back their loans due to the high rate of interest while lenders just want borrowers to follow through on the contract that they signed.

Online payday loans are meant to be short-term loans issued in times of financial emergencies. They are very different from bank loans, credit cards, lines of credit and mortgage loans. A payday loan is much quicker to receive and is much easier to get an approval then other loans. The nature of the payday loan makes it an extremely dangerous loan for the payday lender; as people are given loans with less barring on their past financial history. For these reasons a payday loan comes with a higher rate of interest to mitigate the danger.

Now, some might say ‘ why issue loans to high-risk borrowers? ‘. The simple answer is if cash advance lenders don’t issue payday loans 78% of the people in Canada and the United States will have no access to a lending source. Most people, these days, have bad credit and if the banks won’t lend to them in their time of emergency that leaves a multitude of people searching for cash. It’s obvious that some of these people will turn to criminal measures to obtain the funding they require; while others become beggars. Online payday loans have helped millions of people in their darkest hours. They have saved people from losing electricity in their homes, they have saved the lives of people needing funding for medication and hospital bills. However, the positive effects of payday loans are never mentioned.

It’s interesting that many of the people who complain about the high-interest of payday cash advances have 2 or more payday loans out. If they were so unhappy about payday loans and the rate of interest what possessed them to take out more loans? Some borrowers are con artists who never had an intention to repay their loan to begin with. Many borrowers of online payday loans have a history of unpaid loans and have credit scores that can not be repaired. These types of borrowers, whose credit history can’t be repaired don’t care about repayment because their credit can’t get any worse. Later, they join in on the payday loan bashing claiming that lenders and their interest rate are criminal. Worse, the Financial Conduct Authority changed the amount of times a lender can go into a borrowers bank account to retrieve the money promised to them to just two times. This helps criminal borrowers to succeed in taking money from lenders and never repaying them.

Obviously, not all borrowers with bad credit have no intention of repaying their loans. Some borrowers are good people who intended to conduct themselves in an honest manner but fell on hard times. Life has the tendency of throwing people 2 or obstacles at once. It’s understandable that borrowers may fall upon hard times and have trouble with re-payment. That’s why payday lenders offer a re-loan option which allows borrowers to roll over their loans until their next pay check. This involves having a borrower repaying their loan on the repayment date with the ability to re-borrow on the same day or one day after. What this does is extend the amount of time a borrower has to repay the loan. In 2014, the payday loan industry was forced to change the re-loan policy by the Financial Conduct Authority which mandated that lenders reduce the amount of re-loans a borrower can do to a mere 2.

The payday loan industry regulators seem to be focused on lenders but fail to address borrowers who accept the terms of the loan contract and fail to abide by it’s terms. Like any other contract, cash advance loans must also be respected. Lenders give money to people in need, on the same day that they request it, with minimal hassle and this is the thanks they get.

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