10 Reasons Payday Loans Should Be Banned

10 Reasons to Ban Payday Loans.
10 Reasons to Ban Payday Loans.

10 Reasons Payday Loans Should Be Banned

 

Most of us can recall being in a financially difficult situation. For many people, it only takes one unanticipated expense to cause significant financial distress. Payday loan companies are structured to take advantage of this sudden need of an influx of cash. Payday loans, or cash advances, as they are also commonly called, grant the borrower a sum of cash that must be repaid on his or her next payday, along with fees and interest. In theory, it seems like an ideal arrangement. The borrower gets the money he or she needs

, when he or she needs it, and the lender makes a profit from the exchange. In practice, however, things work very differently. Unbelievably high interest rates and other fees, along with the borrowers own financial situation, can often make repayment virtually impossible. Taking out yet another advance, or rolling the loan over, is often the only solution available.

 

Payday loan companies have rightfully been called out in recent years as predatory lenders, for this very reason. Despite past and pending litigation, and an increase in consumer awareness, it’s still a thriving industry. Part of the reason is that the current economy has caused a number of people to fall into financial distress. For those people, payday loans seem like an attractive, albeit short-term, solution to a desperate problem. Attempts at industry regulation and consumer education have failed in a number of states. The best long-term solution to the problem caused by payday loan companies is to ban them altogether, for the reasons outlined below.

10Payday Loans Do Not Solve Underlying Problems

Payday loans make people more broke!

9A Ban Would Encourage Better Business Practices

Let’s introduce some ethics into lending. Refreshing.

8Payday Loans Encourage A Cycle Of Borrowing

Payday loans create an endless cycle of borrowing.

7They Can Be Financially Detrimental To The Borrower

Payday loans are a bad deal for consumers.

6Bans In Some States Have Been Effective

States must ban payday loans for the fiscal health of its residents

5Even Borrowers Are Against Them

Borrowers love to borrow but hate to repay. And payday loans are a terrible deal for consumers.

4Hidden Fees And High Interest Rates Are Constants

Payday loan fees and sneaky and pile up quick!

3Aggressive Collection Techniques

Hey Moose! Help the payday loan borrower find his wallet!

2Payday Loans Are Often Misused

Payday loans are bad. Plain and simple.

1Payday Loans Are Popular

Payday loans and opiate for the masses. One that comes with usurious interest rates. And yeah, of course, it’s big business.  Just like alcohol, drugs, and religion.