Whilst payday loans have received a lot of bad press due to the high APR charges on these loans one industry official has suggested that they can be very useful for those that run into short term financial trouble.
Over recent years there has been a lot of bad press about pay day loans, and this has largely been based around the astonishing APRs that are charged on the loans. A pay day loan is a short term loan that is designed to tide consumers over until payday comes around, and the amounts available are generally relatively small amounts based on income and other factors.
With most pay day lenders not carrying out credit checks, and with the money being available on the same day in many cases, a lot of people that have been caught short financially have started using these loans. One industry official has recently stated that whilst the APR on pay day loans can be high these loans can be useful for occasional use when consumers find themselves in short term financial trouble.
Anything from a household emergency to unexpected bills can leave consumers high and dry financially, and whilst some people may have friends and family to turn to for a helping hand there are many others that do not. It is these people that may be able to benefit from these loans, and although the APR is high the loan is only granted over a very short term so the charges paid to borrow the money for a few weeks should not work out too high.
The industry official said: “These are primarily short-term loans, which can be availed without the need of attaching any valuable asset of yours as collateral. The loan amount can be utilised to serve various personal desires, such as phone bills, college fees, hospital expenses, electricity bills or tuition fees until your next payday.”
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