Pay Day loans: a blessing or a curse
The present era of global financial crunch, increasing exasperation as well as flourishing producers by rapidly expanding their market with new products being launched everyday has make the life more complicated for an ordinary man. Irrespective of the awareness regarding essential needs and basic requirements, every product is marketed in such a way that it becomes the desire of every heart. To compete with each other in the contest of buying more and latest things and overcome the expenses the consumers has to face financial troubles. An easy solution of such short term financial crises is developed by loan lending industry in the form of Pay Day Loans.
Pay Day loans seem to be a blessing at the time of financial turmoil. These loans are an instant and convenient way load your pocket with money and say goodbye to all the problems. These are a premium choice for the salaried people, particularly middle class and lower middle class on-job persons. The loan money is secured against the borrower’s next pay check. Mostly it turns difficult to manage all the tasks properly till the end of month. To maintain the pace of life and conquer unexpected and accidental financial hurdles, the lenders rush towards these smart loans.
Pay Day loans are becoming more and more popular because they are easy to get and no traditional legal documentation is required. The loan approval procedure is trouble-free and immediate transfer of amount is an additional edge. Some other interesting features of these loans are online access to file an application and no need to provide any reference or previous history of loans taken in the past. Generally in any monetary crises the best and wise trend to cope up with such crises is to rush to these loans without any delay or second thought.
Apparently it seems that the best remedy to bridge the gap between rising needs and depleting money is these loans. But in the reality these loans are an attractive trap to capture the already suffering class. The lender market has designed these loans with high interest rate, i.e. 2 percent to 4 percent as compared to credit cards, and makes the consumer dependent of them. Once you get the loan then a series of borrowing and constant late fee starts. To pay off the previous loan the pay is deducted and again a new season of financial crises start. If the borrowers do not pay the loan at due time then late fee is there to aggravate the situation.
The main users of these loans are low-income group and the elevating interest rate and unawareness about the sharp marketing tricks buried them deep in this vicious cycle. The increasing popularity of these loans put a question mark on the true nature of these loans that are a short term blessing and long term curse.