Who exactly uses cash advances and payday loans? The obvious answer would be people who need fast cash. Dig a little deeper into that thought and many will be thinking these people are low-income workers who cannot keep up with the cost of living. This thinking is not incorrect, but it surely does not present the full picture.
People who are living paycheck to paycheck are not just low-income workers. Homeowners who try to live a lifestyle above their income level are also customers. Those with medical bills, loss of spouse, a new child or trying to keep up with the Jones end up applying as well. Most often, people will initially turn to credit cards. Once those balances have been maxed they turn to a cash advance, payday loan or title loans. No credit check loans will alleviate a small financial crunch, but if the applicant does not have the money to pay off the loan, the transaction will lead to further money problems.
A cash advance lender will defend their services as non-aggressive options for those who need quick money. Many state governments and organizations argue that direct lenders are in fact predatory and that people would be better off without having that financial option. It has gone to vote in many states quite often with only a few of the states passing laws to wither limit or ban short-term loans within their states. With all good intentions, the state regulations opened the door for the real predators to have ample opportunity to prey on the same ones being protected. It is the honest reputable companies which stopped offering loans to those restricted. Not all lenders are responsible. Out of country lenders do not fallow state laws, neither do Native American Tribes. When there are direct lenders connected to those who follow different rules, consumers continue to have access to cash advances,; whether the state likes it or not. Collection laws and interest caps out the door, a person looking for fast cash may just pay a much higher price and be subjected to poor practices as well. The state cannot come to their defense at that point.
There has to be a happy middle somewhere. New laws get lobbied only to be shut down by the voters. What are the people saying? Who can you blame?
Not all cash advance lenders are bad.
Economic hardships across the nation cannot be ignored. While there can be fingers pointed at the cash advance industry, then there has to be fingers pointed to the borrowers as well. When an applicant knows at the time of approval that there will be no money to pay the loan off in full, they need to be held accountable as well. These short-term loans do help in cash emergencies. They do provide relief to financial crunches. Believe it or not, there are successful loans made and paid off daily. Not everyone continues to suffer financially, but we cannot ignore the families which do. Clamp down further on these types of loans, but don’t forget to do the same to banks who provide them as well as credit cards that go without similar regulations.
