Cash advance online lenders and the online payday loan industry has many opponents who have tried to get traditional lenders and lawmakers to offer alternatives to the short-term loans. With other options available, borrowers continue to enjoy the convenience of cash advance and payday loan lenders.
Short-term loans from cash advance online industries have a history of high priced loans which carry even higher interest rates when the loans are not paid in full. The loans are usually only out for about 14 days, and those borrowers who have difficulties making the payoff, could possibly get into a cycle of additional debt. Customers are looking for a boost of fast cash into their bank accounts in order to assist with impending costs. They are looking for speed as well as convenience. Both of these factors keep most coming back to the cash advance online lender.
Attempts to get more banks and credit unions involved with creating short-term loans as an alternative have not caught on quickly. It seems unrealistic for credit unions and bank to adopt these lower-priced short-term risky loans. The people who are applying for these loans are typically ones who will not qualify for loans with traditional lenders. Once credit checks become involved in the process of a traditional loan, many borrowers will no longer qualify. The percentage of credit unions who have offered these loans is less than 10%.
What has ended up happening is that the banks and credit unions who are supplying short-term loans are finding themselves in the negative light as typical cash advance lenders. The fees are high and the payoff is fast with borrowers still struggling with paying it all off with the next paycheck.
It shouldn’t be just about creating new loaning practices, but more towards educating the public about the choices offered. Borrowers prefer no hassle loans. We at Spotya.com understand that. Credit history is a key factor to people’s finances and limits options. Another factor with banks and credit unions getting involved with risky loans is that people’s bank accounts can really be negatively affected. Not only can overdraft fees be applied, but if you try to stop a direct deposit from entering your account the banks can and will freeze your account. People are not looking for additional financial troubles. The majority of borrowers will continue to apply for a cash advance online or other payday loan companies.
What makes cash advance online lenders more attractive to borrowers?
For starters, online lending is just convenient. There is no driving across town or waiting in lines. All you need is access to the internet. You could use your smartphone, tablet, laptop, or even desk computer to fill out the application form. If you do any online banking, there is quick access to a 30 day bank statement. You could possibly have everything you need to apply and sent in within 30 minutes.
Yes the prices are high, but they are also cost effective when paid off on time. There is no threat against your bank account. Having to start over at a new bank or dealing with the one who froze your account is not convenient by any means. There are many responsible lenders in the cash advance online industry. Take some time and do your research before you apply. Understand the expectations of a borrower and ask any question you may have beforehand. Short-term loans do provide relief to small financial problems.
