In Many Developing Countries Lender Of Pay Day Loans is a Real ...

Recent years have seen a boom in companies offering payday loans. They are attractive because they are short term and give the receiver quick access to the cash they need. Many people are using these payday loan lenders when they are short of cash or have an unexpected expense which they cannot afford until their next payday but they need to pay immediately. Payday loan providers offer customers the choice to choose their loan amount and their repayment period. The money is then quickly wired to the customer with a minimum of form filling and bureaucracy.

Payday lending has caused much controversy though as many companies do charge large rates of effective APR, sometimes over 1500%, although the loans do not compound interest as the principle stays the same. Many consumer groups believe this is excessive and say that it can lead to the most vulnerable in society falling into a spiral of debt if they cannot afford to pay back the loan on time. Lenders argue that they are providing a service to willing customers who know the dangers if they fail to repay.

Nonetheless payday loans are a good way of accessing some extra cash in an emergency or for a special occasion on a short term basis. The attraction to many is the flexibility offered by these loans, the consumer has the freedom to choose how much to borrow based on their circumstances and also the period they have to pay the loan back ? also based on their personal circumstances and judgments. These loans are secured on the customer?s next wages and lots of companies offer instant cash within half an hour of applying, ideal for an individual who needs money quickly to pay a bill or to tide them over until their next pay check arrives.

Although much has been made of the high rates of effective APR on these loans and the need to protect consumers?, payday loan companies take large risks lending these types of loan with default rates often in excess of 20%. That said payday loans are a rapidly growing sector of the economy ? In the UK a total of ?1.2 billion was lent via payday lenders in 2009, with the average size of the loan around ?300. Payday loans will remain an attractive option to people in need of quick cash with minimum hassle or those with bad credit histories who cannot borrow from banks.

This entry was posted in Loans. Bookmark the permalink.

Source: http://www.wildwitness.com/in-many-developing-countries-lender-of-pay-day-loans-is-a-real-help-for-people.html

namibia hell on wheels hell on wheels new york city marathon andy williams andy williams nyc marathon