Is Payday Loan The Problem or Poverty?

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Temporary Monetary Relief

Payday loan is a small dollar loan that provides consumers temporary monetary relief. It is a credit line for individuals receiving a regular paycheck yet in financial woe. The only solution for them is to borrow against future salary to pay their bills. Unfortunately, some sectors are saying this type of loans are causing further financial problem. In order to help you decide, whether payday loan is a problem or not, read on.


More and more people are finding themselves borrowing money from payday lenders because of financial difficulties. The average American or those living from paycheck to paycheck often borrow because they have no savings set aside for unforeseen emergencies. They have little financial leeway and majority does not even qualify for traditional loans. These people have properties like car or house that is hard to turn into cash when the need arises. So, what do they do? They turn to payday loan lenders for monetary assistance.

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Payday loan lenders provide emergency credit to qualified individuals. People that are receiving regular income, residents or citizens of the United States, of legal age and have their own bank account that accept direct deposit. Most of the payday lenders give loans even to people with bad credit history as they do not based their approval on the past history but on the financial current standing of the borrowers.


There are some borrowers that blaming payday loans for their financial problem. These are people that do not pay their loan back on time or at all. Take note, payday lenders are lending to people with bad borrowing history. Hence, the interest rate is much higher than banks and other financial institutions.


People that need instant loan approval can borrow anytime they need money but the fast processing and hassle free service comes at a price. And borrowers are well aware of the exorbitant interest rates and what could happen if they do not pay on time. So, is it the fault of payday lenders when a borrower could not pay and the interest rate increased their debts? No!


Lenders are just lending. The root of the problem is not the fact that there are lenders that lend to people with financial problem but poverty. These people are living in the poverty line that unexpected problems forced them to seek help. If you are experiencing financial difficulty, you can borrow money from payday lenders but don’t expect a cheap interest rate.



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