Why US Borrowers Take Advantage of Payday Loans?

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Why US Borrowers Take Advantage of Payday Loans

Many Americans that take advantage of payday loans are indebted for 5 months because they borrow often about eight times a year to pay for their unexpected expenses, routine expenses, and medical emergencies. This article talks about the reasons why many people in the U.S borrow money from payday lender.

Payday loans are well known in the United States as a short term solutions to money problem. The easy process, very basic criterions and fast approval have definitely made payday loans close to the heart of people in need of immediate loan. Come to think of it! The no collateral, no credit verification and hassle free service of online payday loans has further increase the popularity of unsecured small dollar loans.

First time borrower according to survey uses the money to pay for their credit card bills, mortgage payments, rent, and food, while the rest or about 16% of the borrower pay for their medical emergency and other unexpected expenses.

Where Would Borrowers Get Instant Loan If Payday Loans Not Available?

If payday loans are not available, hypothetically speaking people would cut back on their expenses, as to the extent depends on what they are willing to give up from their lifestyle. Aside from cutting back expenses, some people would resort to borrowing from friends, family, co-worker and employer even if it is embarrassing especially when there is no other recourse, and the need for extra cash is crucial.

There are also people that would pawn or just sell their possessions to get the cash they need. Last but not the least, people with still good credit rating would turn to traditional financial institutions for monetary assistance like banks and credit union.

Is Payday Loans Advantageous?

Yes, as these types of loans take away the hassle of borrowing from other people since borrowing is not even easy to do, while selling things that you have worked for is disheartening. So, payday loans are definitely advantageous and the reason why Americans borrow money from payday lenders.



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