There has been a lot of talk recently in a number of states in the US that the payday loan industry is crooked and takes advantage of people in bad financial situations. In most cases, nothing could be further from the truth. The worst thing about payday loans is the fact that the interest rate is significantly higher than the interest that a bank would charge you for a loan for the same amount of money, but the tradeoff for that high interest rate is more than fair.
One of the tradeoff points is the fact that when you go to get a payday loan, they do not run a credit check to see how much money you already owe other people, what your credit score is, and etcetera. As most people who keep track of their credit score know, every time your credit score is pulled, your credit score actually drops. No one these days needs their credit score to drop any more.
The second tradeoff point is the fact that payday loans are easy to obtain. There are only a few different simple requirements to get a payday loan. You must be considered a legal adult where you currently reside, be able to prove it with your driver's license or other form of identification, you must have a checking account, and most importantly, you have to have a job. You also have to be able to prove that you are employed by having a copy of your most current pay stub; some will require two pay stubs to serve as proof.
The industry gets a bad reputation due to legislators and big banks taking it upon themselves to tell the public that people who take out payday loans are being taken advantage of. When was the last time you decided someone was being taken advantage of without asking them first?
Most of the time people complain about payday loans because they take out too many of them and cannot repay them back on time. This is irresponsible borrowing on their part. There is absolutely no reason for someone to take out more than one payday loan at a time, even though another payday loan from a separate company may be available to them. Just because something is available to you does not mean that you get to blame someone else for your irresponsibility.
If you went to the grocery store and bought a bottle of over-the-counter pain killers, took too many of them, and became ill, you could not sue the grocery store because you would not even remotely have a case. You cannot blame the store for your own irresponsibility any more than you can blame a payday loan lender for you not being able to repay your loan on time.
There are a large number of people in the United States that would have lost a number of their possessions were it not for the availability of payday loans. Not everyone has access to family or friends that have the money to help them make these payments with or the credit score to get a short term loan from the bank. These loans, however high the interest may be, are the only option some people have to keep their home or vehicle from being repossessed.
Anyone considering taking out a payday loan needs to realize that they are most certainly not a long term solution and will end up costing the borrower a lot of money in the long run if they refuse to be responsible with them. Cut back on spending, do without some things, do what you have to in order to get the loan repaid, but please do not take out more than one payday loan at a time and then blame it on the lender for giving you the money. Borrow responsibly.
