Many public officials and political activists criticize payday loan lending. These opponents argue that businesses prey on low-income families and military personnel, trapping them in high-interest loans and propelling them into a cycle of debt. So who uses payday loans? Read on and find out. You may be surprised.
A quick look at an online store locator reveals the truth. Most reputable payday loan lenders locate in middle-income areas and serve hard working, middle-class citizens who need a few extra bucks to get them out of a bind. No matter the color of the collar, hard working Americans have come to depend on payday loans in the hardest of times.
Preying on the poor is not only bad moral practice, but bad business. Neither party gains when repayment isn’t made—the lender won’t get paid and the borrower will be hit with fees. For this reason, most payday lenders require proof of income and an open checking account in order to take out a payday loan.
Payday loans should be used for emergency situations only. Most lenders charge between $15 and $25 for every $100 borrowed. While the APR seems high, licensed lenders must state their rates in annual terms. When broken down to the actual time of repayment, the rates are relatively low.
You’ll find there are many false assumptions about payday loan lending. Payday loan customers make up the working core of America’s middle class. These educated, family-driven individuals turn to payday loans to get back on track when unexpected expenses arise between paychecks.
