Payday Loans

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An article submitted for publication by Angelina Rosario. Ms. Rosario is solely responsible for the contents of the article.

Please note that the appearance of this article does not imply that this website recommends Payday Loans. In fact we DO NOT recommend Payday Loans. Since this article was published several states have legislated that Payday loans ARE predatory.

A similar business is commission advance programs targeted at Real Estate Agents with commission due but not yet paid. It concerns us that there are people working as Real Estate Agents, advising people on the biggest transaction of their lives, who are so incapable of managing their own finances that they cannot wait for a real estate closing to receive their commission.

Payday loans are loans of a small amount, taken for a short duration of time. Payday loans are generally meant to be paid off on the next payday. Payday lenders loan out thousands of dollars every week to people who are in dire need of money. The Community Financial Service Association of America, payday loan cash advance industry extends to about $25 billion.

Payday lending is often regarded as something predatory and it is of the common belief that payday customers are being used as fodder by the money hungry payday lenders. However, the

various researches undertaken throughout the years contradict the view that payday loans are predatory and the borrower is always being preyed upon. In fact, recent studies have shown borrowers preferring payday loans to other loan alternatives.

The huge Annual Percentage Rate (APR), in the range of 391% and higher often makes it intriguing as to the people who opt for these loans. But studies conducted throughout the States show that people from all walks of life consider payday loan cash advance as an affordable option to meet their financial needs. The US Census report of 2000 show that 22% of the surveyed payday loan borrowers hold a bachelor’s degree from college.

More than two-thirds of the people surveyed reported an annual income of a minimum $25,555 and has a savings account. Also, 51% of the surveyed population had a retirement savings plan. Viewing the industry statement, it seems that the payday cash advance customer has more than average level of education than the general US population.

A typical payday loan customer is between 25 to 40 years of age and has an annual income between $25,000 and $50,000. Also people from all walks of life, including teachers, civil servants and corporate employees considers payday loan as an efficient solution to the short term financial emergencies.


Category: Payday loans

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