Get a Payday Loan in UK

Payday Loan Users – Crazy?

I have been called many things and crazy is one of those.  Yet does this adjective apply to all payday loan users?  You may be wondering as to why I am asking this question.  The answer is this – I ran across an article online wherein the author was saying that people who take out payday loans are crazy or not in their right minds.  Of course, my initial reaction was “No way!” This is such a sweeping generalisation!  So I went ahead and read it anyway – to see if what the person was saying made sense.

He noted down several points that I would like to address as well.  First, he wrote:

If you could qualify for a loan for interest rates of 10-20%, or even higher from these payday loans specialists, then I believe you can qualify for loans from a traditional lender for about half that rate.

If one did not know more about payday loans, this statement may make a lot of sense.  However, one of the biggest reasons people opt for payday loans is the fact that they cannot get loans from the conventional institutions – either that or they do not want to go through the hassle of applying for one wherein the process is long and tedious.  So, although it is true that conventional loans could have much lower rates as compared to payday loans, the fact is that many people who take out payday loans may not qualify for conventional loans.

Furthermore, he wrote:

Think about it if they were not making money on these loans, why do you see more and more of these businesses?

Of course payday loan providers are making money out of their products!  Don’t all business have the same agenda?  We have to face the truth here – all businesses, banks, and credit unions exist to make some sort of profit.  Otherwise, how would they be able to continue to provide the service or product that they have to offer?  Going along these lines, banks and other credit institutions have been around for the longest time.  If we follow the reasoning of the above statement, doesn’t it also mean that they are making money on their products and services?

Another point:

The majority of the payday loan customers are also young and poorer people who simply cannot afford the addition of another high interest loan.

If you read up on the statistics on payday loan customers, the fact is that “poor” people are not the bulk of the clientele.  In fact, this was just a point raised in my previous post.  Though the setting of that comment is in Canada, I bet that it is basically the same most everywhere.  The fact is that people need money sometimes and it is not just the “poor” who make use of payday loans.

In fairness to the author of the article, he did say that “This does not dismiss the fact that people should have personal responsibility in there own lives. These payday loans are simply an extension of credit to people many times without the consideration of ability to re-pay.”

Indeed, the ultimate responsibility lies with us – the consumers.