Why would anyone take payday loans?
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M$8 Answers
1)
The person taking the loan does not understand the fees and interest associated with borrowing the money.
As you know, it is expensive to take a high interest loan. Completely understanding the interest rate and importantly the associated fees for payday loans is very important. Some people already feel bad about taking a payday loan and would rather ignore these fees, take the money, and run. These are the folks that the fees hit the highest.
2)
The person taking the loan has no other options or at least feels like there are no other options.
Everyone has money problems from time to time. Things can even get pretty bleak and people have done a lot worse things to solve financial problems than take a payday loan. Taking a costly loan can seem like the best option at the time if no other options are available.
3)
The person taking the loan does so on an impulse at a convenient retail location.
Payday loan stores are located in kiosks, on main streets, in malls, colleges and almost everywhere you turn. Convenience is a key motivating factor in consumer purchase decisions and payday loans are no different. If people need money and you put it in front of them, they are more likely to take it.
CONCLUSION
Some of the things in our society don't seem right or fair, they appear to be created for no reason other than to take advantage of people. While we may not necessarily empathize with products that are offered, there is always a quantifiable reason that customers demand a product. High interest payday loans may appear unnecessary, but they do fill a need in the minds of many consumers.
Please see my sources below for a couple of interesting articles relating to this topic.
I hope that this was helpful!
You can leave an optional "tip" with Mahalo's virtual currency, Mahalo Dollars. If you are asking a difficult question that might require some research, or if you'd like a wide variety of feedback, a higher tip often leads to more answers to your question.
M$
You can leave an optional "tip" with Mahalo's virtual currency, Mahalo Dollars. If you are asking a difficult question that might require some research, or if you'd like a wide variety of feedback, a higher tip often leads to more answers to your question.
M$
You can leave an optional "tip" with Mahalo's virtual currency, Mahalo Dollars. If you are asking a difficult question that might require some research, or if you'd like a wide variety of feedback, a higher tip often leads to more answers to your question.
M$"
You can leave an optional "tip" with Mahalo's virtual currency, Mahalo Dollars. If you are asking a difficult question that might require some research, or if you'd like a wide variety of feedback, a higher tip often leads to more answers to your question.
M$
I have a buddy who has frequently visited such places to get cash advances on his paychecks at ridiculously high interest rates. Often he'd end up spending much of his cash on not only bills but other stuff which arguably isn't essential.
You can leave an optional "tip" with Mahalo's virtual currency, Mahalo Dollars. If you are asking a difficult question that might require some research, or if you'd like a wide variety of feedback, a higher tip often leads to more answers to your question.
M$You can leave an optional "tip" with Mahalo's virtual currency, Mahalo Dollars. If you are asking a difficult question that might require some research, or if you'd like a wide variety of feedback, a higher tip often leads to more answers to your question.
M$You can leave an optional "tip" with Mahalo's virtual currency, Mahalo Dollars. If you are asking a difficult question that might require some research, or if you'd like a wide variety of feedback, a higher tip often leads to more answers to your question.
M$
Some people use payday loans to make a big ticket purchase where they couldn't get financing or credit maxed out due to bad credit rating.
You can leave an optional "tip" with Mahalo's virtual currency, Mahalo Dollars. If you are asking a difficult question that might require some research, or if you'd like a wide variety of feedback, a higher tip often leads to more answers to your question.
M$
Here's an interesting U.S. based article from Slate about payday loans: http://www.slate.com/id/2100276/
I was a consumer lender for 27 years ending in about 1980. We didn't have these loans back in those days but I can tell you this. People who are not savy about money management and who want something badly, will do or say anything to get the money to buy it with absolutely no thought of how they are going to pay it back. And that doesn't even get to the desperation issue. People who have a child with no food or about to lose their heat will do anything.
These loans should be prohibited.