After all, payday loan services do providing lending to those who otherwise wouldn’t have it to begin with.
(PRWEB) October 29, 2011
In light of the recent discussion in the media about Payday Lenders being financial predators, USAPaydayForever.com would like to announce today, that they are not. Many feel that Payday Lenders are financial predators. This perception is far from the truth. It is understandable for many people to be hesitant to approach lenders to get a payday loan. It is well known the lenders who provide this type of service typically charge a higher APR than just about any other lending type. This has caused payday loan services to be highly controversial and subject to legal challenges. In fact, many jurisdictions across the country limit how much lenders can charge in interest.
Many people claim that these companies are predators who simply want to take advantage of low-income areas, leaving them in perpetual debt & poverty. Daniel, the owner of an online payday loan company named USAPaydayForever.com was contacted to see if he could shine a ray of light on the situation. He was asked if he could explain why payday loan companies charge high interest rates, and how they aren’t predators.
According to Daniel, “Many people who have signed up for various payday loan services across the country have been burned by them. I do not doubt this. However, I don’t think this is because of the interest rate percentage a lender charges. Payday loans are unsecured loans, this means that they aren’t backed by anything, including collateral. Also they are very easy to get. This makes these kinds of loans very risky to lenders. The high interest rates are simply the only way to recoup losses to stay in business.”
As it turns out, Daniel’s claims do indeed match up with reality. While it’s true that this type of lending has hurt people, there is more at play than people realize. Payday loan lenders tend to see a very high rate of defaults on their loans. These rates tend to be around 20%, but they can go higher. On top of that defaults can cost lenders up a quarter of the money they pull in.
Daniel was also asked about how these loans are still not in some ways predatory, when considering just about anyone can get them. He told me, “It’s true that you don’t need credit to get a payday loan, but that doesn’t mean everybody should get one. I understand that people sometimes feel pressure to get such an easy loan, even when they can’t afford it. The fact of the matter is it really comes down to personal responsibility. These kinds of loans (payday loans) can be a real lifesaver to those who take the time to figure out if they can afford one, or not. Just because some people use them unwisely doesn’t mean they are predatory, and it doesn’t mean that those who are responsible should have this lifeline taken away from them because of the poor choices are people make.”
USAPaydayForever.com owner Daniel’s words should be taken into consideration before getting a payday loan. These loans aren’t for everyone, and good judgment should be involved in any kind of financial decision. After all, payday loan services do providing lending to those who otherwise wouldn’t have it to begin with.