Money Management

Payday Loans Help People

Payday LoansPayday loan companies are banks for poor people. They cash your checks, make money orders; you can even pay your bills there. Some of these places will help you with your taxes and even set you up with a prepaid visa card.

The downside is that all of these things cost money. But that’s the point of business, to make money. You can’t really fault them for that. They do charge a high interest rate, if you change their fees to an APR. But apparently it’s not too high, because people are using them and their business is growing.

The point of these companies is to cover you in case something happens in life and you need emergency cash loans to help you until the next paycheck. For instance, if you have a flat tire, or have to go to the doctor because you get sick. If they didn’t help these people, how would they get by that week?

They basically act like an emergency fund. Well, an emergency fund that costs you money. But it costs money to be poor, so you have to live with that.

They do a great thing that doesn’t help all of their customers, but it does help a few. What they do is help you realize that you need to change your life. They help you to think how you can get out of the lifestyle of having them call you everyday to get their money. They cause you to seek knowledge about getting your finances in order. The problem is that all of their customers don’t gain that knowledge. They prefer to think that’s the way of life and wallow in their sorrow.

The point of this post is to take the blame off of payday loan companies. It’s not their fault you choose to not become financially aware. Yea, they are seedy and pray on the weak, but if they didn’t, someone else would.

If you don’t want to use a payday loan, then set your own up. Start saving a little money each week and then when you need to borrow some money from it, charge yourself a fee. There you go, problem solved. Of course it’s not that simple, you first have to get control of your finances so that you have some money to start saving. That combination will keep you from using a payday loan company. Or you can use a charity like Modest Needs to help you out.

The point is, what people need to do is start becoming aware of their financial habits and change them for the better. If I may borrow some lyrics from the great Bon Jovi, you need to say to yourself “It’s my life, it’s now or never.” Start learning today and change your life.

So what do you think?

Comments (8)

  • I’m not the assuming type, but I take it this was a little bit of advocating for the devil? Personally, I think payday lenders are one of the most blatant examples of preying on the weak in A-merry-ca today.

    Perhaps there ARE some out there who are responsible, and try educating their patrons on their finances. But having dealt with several in the past, I haven’t seen one that puts that high on their agenda. It’s all about touting their “service” of getting money to you quickly.

    It’s a sad commentary when the town I live in (around 7k population) has no less than half a dozen payday or title loan lenders along the main drag. These places are a blight.

    Good post, I will say. Made me tell how I’m really feelin’. ;)
    .-= ChrisFM´s last blog ..Where Does Your Happiness Come From? =-.

    • Yea, this was a devil’s advocate post. I did let my feelings of them being seedy come out. Everywhere I see a payday loan business there’s always another one around the corner. They are there to try and catch your eye at a weak time in your life.
      I will say I’m not a fan.

  • I agree with ChrisFM. These places definitely hurt people more than they help. I think it is nothing more than legalized loan sharking. They are growing because they are good at marketing and convincing poor people that they can help.Then when they pull people into their web of deceit they become angry and aggressive with their recovery methods. They only care about their bottom line and the people that use them stay Financially Poor.

    Leeches only care about keeping themselves alive, not what trouble they cause for the host.
    .-= Brad Chaffee´s last blog ..Your Interview With Local Psychologist Dr. Matthew Bowen Part 1 =-.

    • I liked the use of my website name in your comment. Very nice. These poor folks that get caught up in these loans need to be taught how to manage their money so they can better themselves.

  • Payday Loans Help People…

    Although many criticize payday loans, there is some truth to what this article says, namely “Payday Loans Help People”. In my opinion, if you go by the rules and pay off your payday loan according to the contract, it could actually work out for you i…

  • Payday loans are legalized loan sharking. Those poor people will stay poor if they keep doing business with these types of businesses.

  • I just finished reading “Broke, USA” by Gary Rivlin, which details the history of payday lending, so this post is timely for me. Too many times, I have seen friends get stuck in payday loans – they repay the money, only to need another loan to pay their bills. After a few months, the loans are accelerated so you must pay them back every time you get paid instead of once a month. I watched a friend pay $590 every two weeks to borrow $500 more – that’s losing $180 a month!

    The problem is, if people are so tight financially that $200-$500 is a crisis, payday loans are only providing a band-aid. And not even a good brand name band-aid, just a cheap one that pulls off half the skin when it’s removed.

    Even though I have a small emergency fund, I haven’t had it for long. Many times, $20 was the difference between making it until payday or bouncing the checks I wrote to try to “float” until the end of the week. Taking a few hundred out of my paycheck to pay back a payday loan would have prevented me from paying my bills and buying groceries. And that’s the trap people get stuck in.

    Unfortunately, I don’t think payday lending is going anywhere. It’s a way of life for the people who can least afford to throw money away. And it’s sad.

  • Payday lenders do loan money at very high interest rates. But without demand, there would be no supply. These people frequent payday lenders because banks and credit card companies won’t loan them money. Why? Because many traditional banks can’t offer them a loan at a high enough interest rate to make money from them. The default rate would be too high. Although I wouldn’t recommend taking out a payday loan, I know first hand how risky these types of borrowers are. If poor people want to put payday lenders out of business, they should stop doing business with them.


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