You can’t drive down the road without seeing advertisements for payday loans these days. You might have even noticed an overabundance of shops pop up in your local mall. They’re all offering payday loans—fast. Why? What’s made payday loans so popular lately?
According to the FCA, over 50,000 credit firms were active in 2016. Around 200 of these were payday lenders. Today, those numbers have increased many times over. It’s a growing industry, pure and simple.
The Growth of Payday Loans
First, let’s explore why this industry recently experienced a boom. Many financial experts will outlandishly claim that payday loans were the reason the recession occurred. But that’s ridiculous. There are many factors to blame.
Payday loans were an opportunity for individuals and families struggling financially to pay their bills on time, put food on the table, or keep their car on the road. People started to realize how effective and fast such loans were. They were an opportunity.
Once the recession ended, payday loans took off faster than ever before. In many areas, the cost of living was increasing exponentially. The price of milk, bread, and eggs also rose. Groceries were becoming more and more expensive for families. It was just too hard for some to make end’s meet and survive. Thus, the payday loan helped keep families afloat.
Pros and Cons of Payday Loans
That being said, there are, of course, pros and cons to payday loans. When used correctly, a payday loan can provide a huge boost to your financial and living arrangements. But as with any loan on the market today, there are downsides.
If you have bad credit and emergency expenses, a payday loan can save you. When used effectively, a payday loan will work as a short-term solution. Furthermore, the application process takes less than 30 minutes, and you’ll have a loan decision shortly thereafter. You could have your money in a single afternoon.
The biggest drawback of payday loans, of course, is the risk of being unable to meet the loan repayment terms. Most payday loans have a higher-than-average interest rate when compared to a credit card.
If you keep up to date on your payments and don’t fall behind, a payday loan could be a viable solution to short-term financial woes. You can find an online lender for a fast payday loan and see for yourself how one may help your situation.