When hard working people run into financial dire straits, payday loans provide them with the necessary funds to ensure that their life remains on track. Being able to receive funds rapidly during a time of need is important, but there are many who see payday loans as having a bad reputation.
So why does this helpful industry receive such a bad rap? The answer is simple: a lack of education. While there are certainly payday loan companies that take advantage of the working man with out of this world interest rate and unsavory requirements (such as upfront payments), there are a wide range of payday loan companies that are willing to help those who are in need, without unnecessarily gouging them.
There will always be companies that are less than reputable, companies that do not operate with the client's best interests at heart, regardless of the industry that is being investigated. Certain payday loan companies seek to mislead their consumer base and this leaves a black mark on the industry as a whole.
However, the customer also plays a role in the poor perception of a payday loan company. There are many customers who tell horror stories about their experiences with payday loan companies, only to leave out the part where they did not read their agreement in its full entirety. In these instances, it can be difficult to take the complaints seriously, since the consumer did not take the initiative to educate themselves before signing on the dotted line.
When we need money, the temptation exists to simply accept the first decent offer that comes your way. But payday loan companies are not all created equal and consumers who do not shop around are often left wanting more over the long haul. This is true of any major financial decision that a customer will make.
Consumers that are willing to neglect their level of personal responsibility when it comes to a decision of this magnitude will always end up being unhappy, whether they are shopping for a payday loan or a new apartment. It is understandable to have urgent financial needs, but this does not mean that you should throw caution to the wind and take whatever offer you can get.
Yes, the interest rates when it comes to payday loans are typically quite high, but guess what? You are not just paying for the loan, you are also paying for the level of convenience that it provides. If it was possible to walk into a bank or a credit union and receive the loan needed within 24 hours, while paying a low interest rate, the market for payday loans would evaporate in a mere instant.
The amount of scorn that is directed towards the payday loan industry ignores this crucial fact. There is no other option that can provide you with the money that you need to escape a financial emergency this quickly. The payday loan industry is built on servicing an audience that is essentially out of options.
No one ever views these complaints through the lens of the payday loan companies. There are far too many instances where clients take too long to pay off their loans or simply go into hiding for them not to construct rules that work in their favor. These high interest fees are put into place to cover their inevitable losses.
If a person does not have any collateral to offer or any upfront cash to help them secure a loan, what is the motivation of a payday loan provide to bend their rules to their whims? The amount of risk that is being taken by the payday loan company is onerous, whereas the client is only risking damage to their credit report.
In most instances, the type of person who is willing to default on a loan does not care if their credit report experiences a downgrade. They have already placed themselves in financial dire straits and are often looking for a quick fix, instead of a long term solution to their problem.
Payday loan companies are not trying to hoodwink their clients and there are really no secrets. Those who criticize them because of a bad experience that they had in the past are usually guilty of signing their contract without reading and allowing their desperation to make the decision for them. This is always a recipe for disaster, regardless of the situation that we are in.
A payday loan client often fails to realize that they are gaining access to something that would not be available to them otherwise. They have not done their homework and they do not have a legitimate level of experience in these matters.
Payday loans are designed to be used, instead of abused. They are not created to fund your vacation or a big ticket purchase that you would struggle to afford otherwise. If a client is not using a payday loan for a helpful purpose or an emergency, they will tend to experience a major letdown when the bill comes due.
By taking your time to do the proper market research, reading the terms and conditions of your loan and having a realistic point of view about what the loan will entail, you can steer clear of all the pitfalls that give payday loans a bad reputation. As with most problems that we encounter in life, perception does not always equal reality, especially as it relates to the court of public opinion.