Payday Loan Industry
One of the most popular forms of credit service available these days is payday loan. Several people are now looking for it and as their number continues to grow, more and more payday loan companies emerged making the payday loan industry one of the largest loan industries in the whole world.
The payday loan industry's rise is actually the result of the ever growing popularity of payday loans among many people. It has been noted that payday loans, also known as deferred presentment, are currently available in 36 states in the US. Aside from that, they are now popular, so is the payday loan industry, among many parts of the world such as Canada, Australia, South Korea, England and much more. They are actually considered as small and short term loans that allow the people to obtain money against a post dated check. And, as it is observed, the payday loans industry's target are actually the younger consumers, those people with limited understanding of finances and those who are really up to the neck in debt. This claim is even supported by a certain survey and the Federal Trade Commission which have particularly shown that the target of the payday loan industry are typically individuals who are high in debt or even those who have a history of employing high risk lenders.
There are actually indications of the growth of the payday loan industry. Perhaps one of those is the fact that in the State of Wisconsin alone, the Department of Financial Institutions (DFI) accounted 839,285 payday loans totaling $200.2 million just in the year 1996 alone. Along with this, the Department of Financial Institutions has reported that there had been an increase in the number of licensed payday loan lenders in the state. In addition, a recent report came out regarding the payday loan industry in the State of Arizona, which maintains that the loan against the paycheck the customers haven't yet earned generally carries a 15 percent fee. And, on the average payday loan of $300 for eight days, such 15 percent equates to an Annual Percentage Rate (APR) of 459 percent.
As the payday loan industry continues to grow, check cashing and payday loan shops are popping up like mushrooms. Several stores are advertising payday loans on their windows and notably, payday loans are even part of some advertisements on the radio, television, the Internet and even the email.
According to the payday loan industry propaganda, everybody needs a payday loans. The payday loan industry claimed that payday loans are quick, a no hassle way for customer to secure small, emergency loans, or no red tape. The payday loan industry even claimed that their payday loans generally serve an under-served market due to the fact that neither consumer finance firms nor standard banks are interested or willing in originating payday loan amount of $100 to $500 non-secured loans.
Well, to some degree payday loans are beneficial. Yes, they are quick and relatively hassle free, but this does not mean that they completely are efficient and convenient, as the payday loan industry strongly holds. In fact, many experts have noted that payday loans are but the least prudent way of borrowing money. So everyone should then be wary and don't just accept what the payday loan industry sectors are claiming.