It is hard to argue with the convenience of a payday loan. The concept is simple: receive the money you need to help you make it until your next paycheck. Countless consumers have benefited from these short-term financial services and have returned to positively review the service they received. Although some industry critics have negative things to say about short-term borrowing, there are plenty of situations that they can come in handy. Learn more about the history of this loan type, along with the benefits that come from working with a trusted online lender.
A Brief History
The concept of borrowing has been around almost as long as recorded history. In ancient civilization, this was called a "usury." These transactions were often regulated by the dominant religious group of the day. In fact, researchers suggest short-term lending was a common aspect of Roman society. Moving ahead to the 19th century, pawnbrokers began to emerge as people were looking for viable ways to borrow money quickly. The first savings and loan bank was established in the United States in 1816, called the Philadelphia Saving Fund Society. This gave the average citizen the means to borrow money, although the services were considerably difficult to qualify for. Fast forward to the 1970's and a brand new concept was introduced: a short-term loan that was secured by the borrower's paycheck. The payday loan was born. This revolutionary service gave borrowers the chance to get cash on the spot without having to undergo credit checks or use personal property as collateral. The demand was significant and retail loan stores began to pop up all over the country.
About 20 years later, the Internet began to grow in popularity as more American households were using computers on a daily basis. Tech-savvy lenders began offering services electronically and consumers had yet another way to get money quickly. As time progressed, lenders started offering their services entirely online without requiring the consumer to fax the application form in order to be approved. People could be approved without even leaving the house for the first time ever!
How it Works
These days, you as the consumer have plenty of different options to choose from when it comes to borrowing money to tide you over until your next paycheck. If you do a local web search or look in the phone book (gasp), chances are you can find several different providers in or near your neighborhood. If you want quicker and arguably more secure service, you don't even have to leave your home. Online lenders offer the same convenient services, but with no paperwork required. All you have to do is apply and money can be directly deposited into your checking or savings account within hours upon approval. It really doesn't get more convenient than this when you consider the alternatives. When you opt for the online option, you won't have to fax documents or stand in line waiting patiently for service. Furthermore, you won't leave a retail establishment with wads of cash, leaving you susceptible to robbery. Repayment is a breeze as the amount you borrow plus the nominal convenience fee is automatically deducted from your bank account. If you ever want to rollover your balance or take out another loan, you can work with your lender directly via the Internet instead of having to make another trip to a brick and mortar location. As you can see, there are a lot of perks that come from working with a reputable online lending company.
Separating Fact from Fiction When it Comes to Borrowing
You may have read some of the negative things written about short-term lending. Some industry critics are bent on disparaging this practice while lumping all lenders in as one entity when this isn't always accurate. You often hear of high interest rates and predatory lending practices at the top of the list of complaints from critics discussing unsecured loans. While it may be true unsecured loans come with higher interest rates than their secured counterparts, it isn't all too surprising why this is. First, these borrowing services come with a much higher risk to the lender. There are no credit or background checks required in order to qualify, so these services see a higher rate of default, adding to the associated costs. Next, the APR figures used by critics relate to the amount in interest a consumer would pay if it took an entire year to repay the lender. Payday loans are intended to be paid back within a relatively short period of time (usually within two weeks), making this figure simply inaccurate in the vast majority of cases.
In reality, these services are ideal for consumers that have nowhere else to turn. Maybe you are dealing with past financial blemishes on your credit report or you have no history at all. Maybe you forgot about a bill and don't want to deal with the late payment fees and possible dents in your credit rating. There are plenty of reasons to consider using a short-term financial solution such as the ones our partners offer if you are struggling. Each year over 19 million consumers rely on payday loans to help them make it until their next paycheck when money is tight. Some studies conclude the majority of applicants are high school graduates with at least some sort of higher education, dispelling the myth that lenders prey on the elderly, poor and uneducated. Also, the amount you will pay for the convenience is always prominently displayed in your accompanying documentation when you work with one of our trusted lenders. This means you will know exactly how much to budget when borrowing and it allows you to make a responsible, informed decision.
We all deal with moments of financial insecurity from time to time. It might be a bill that shows up when you least expect it. Whatever it is, you need the confidence that comes from knowing you have options. We have established a network of lenders that are committed to helping you tackle financial issues quickly. After all, we want you to have the best experience.