Payday advance providers don't prey on the poor

The desperate and poor are preyed upon by greedy, evil Payday loan lenders and personal bank loan companies. The claim is that individuals that can barely scrape by are enticed to take out loans until payday. Then the payments are made too high for any person to pay them, and a cycle of debt begins. The poorest and most desperate and vulnerable are really not who payday lenders lend to. If payday lenders really were lending only to individuals who could not pay them back, the entire industry would have been bankrupt long ago.

The average customer wanting a payday loan

If it were true that Payday loan companies preyed on the poor, that would be reflected in demographic studies. That is not really true though. The average short term loan borrower is really the definition of middle class. The average payday consumer makes between $25,000 and $50,000 a year which takes apart that rumor. Usually they’re married with children. They have typically finished at least high school if not also some college. The borrower being not able to pay back the loan is the reason why the government says payday loan companies are predatory. Given that many payday lenders barely make $2 of profit from a single loan, it’s hard to believe that instant cash would be lent to anyone that could not repay it.

Cash advance stores cannot lend to just any person

The presumption would be that cash advance loan companies will give money to anybody just to get their hooks in them. That is far from the truth. 11 percent of all applicants applying for payday loans are totally turned down while 20 percent of first time applicants are rejected. You will find criteria for small loans certainly. The most usual criteria for getting a cash advance? You can discover that. It’s really easy. Having some definite payday cash coming in is expected.

Even the Crusaders said not to hold water

Lending to anyone wouldn’t make sense for a payday lender to do. It would not make any money. If borrowers were struggling to repay, no payday advance store would stay in business long. The profit margin isn’t very big. It is 10 percent or less usually. That’s far less than Bank of America could tolerate. Want more facts and statistics of payday loans? Personal Money Store has them for you.