Helping Hand For The Poor
All we hear about payday loans is people complaining about its high-interest rates or how difficult it is to pay them back, or that borrower keeps on falling deeper and deeper. Yeah, we have all heard the same story, and apparently, the government had too. Interesting how nobody ever questioned the other side of the story, like how come if these payday loans are so awful, that they are still one of the most consumed loans in U.S? That when in need of desperate money and instant cash, people turn to payday loan rather than others kinds which seem to be all people talking about. And more importantly, why the les fortunate in the United States are not happy with the news of the industry shutting down?
It is known that payday lenders serve 19 million households of America at the time of cash-flow shortfalls. It is not only the consumers that they benefit; in fact, thanks to payday loans America’s economy also benefits from the industry as it employs more than 50,000 Americans who earn wages in billions which subsequently generates almost 2.6 Billion dollars in state, federal and local taxes. So how can a loan be bad if it is not only benefiting the whole country but taking care of the working class and especially those who live paycheck to paycheck?
A person with a job–that hardly pays– and no credit history has no choice but turn to payday lenders in the face of a financial disaster. Understand that this is their only option, and when even this door is closed for them they will have nowhere left to go.
Let’s, for instance, take the example of a single mom, Elena Parker. Carrying some stuff out of the house, her front door gets broken. Since it’s the middle of the month, Elena is short on the cash that would be required to get the door fixed, so she goes to payday lender and borrows $100. On her payday, she returns the amount back to the lender with an interest of $15 on top. Isn’t this option much easier and helpful rather than living with her main door open for the remaining of the time until she receives her paycheck? Yes, it is.
Many would instantly point out that the interest rate for $100 was quite high; but, the inconvenience and trouble she would have had to face if the door stayed broken would have been much costly. It is true that the bad sides of payday loans appear more often than necessary yet we can safely say that the evil side of loan appears only when it is treated badly.
Payday loans are short-term loans and must be acquired only in the cases of extreme urgent and dire situations and then must be paid back as quickly as possible. If done in this simple and easy manner than these payday loans are actually a blessing in disguise as it has proved time and again to many poor people.
One thing is for sure; if this industry comes to an end, then those who fall in the low-income bracket in America are going to lose their helping hand and suffer a great deal.