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Nobody likes to stay in debt. It’s a bad feeling, and a financial state that is likely to affect the way you lead your lifestyle. For instance, if you have taken a home loan or a car loan, which are usually for the long-term, then most people will always want to pay back the month’s due before anything else. It’s a top priority. Everything else has to wait.

But what about short-term loans, like a payday cash advance, for example? These are small dollar loans where the loan is offered for a couple of weeks till the next pay day. The amount is also usually between $500 and $2000, and as such, a high majority of people can pay back their debt on time without a problem. It is not a problem usually. But sometimes, unforeseen things happen. That’s life. You may suddenly face a situation where you had to spend more than anticipated, and at the beginning of the next month, you simply don’t have the money to repay the creditor.

Harassment by Debt Collectors a Real Problem

If you are in debt, and can’t repay, many debt collectors will keep calling you, making embarrassing calls, sometimes several times in a day. Suddenly, you will see many of them turn aggressive, though there are many ethical and legal payday lenders who will give you a second chance to repay. But these are exceptions. Usually, you will be in a lot of trouble from these creditors. It is not uncommon to feel like running away. read more


Payday lending businesses across the country has been lambasted by a lot of critics in recent times for charging high interests. The general public has been made to believe that you should stay miles away from them because taking a short-term loan from them could land you in trouble, as you are likely to fall into a debt trap. Millions of people across the United States, though, continue to approach these businesses when they are a little short of cash, and need funding for the last few days of the month.

There have been voices of dissent also as some critics, accountants, former bankers, and lawmakers have pointed out that there is a real requirement in the market for payday loans. A large section of the population, particularly those who don’t have a perfect credit score have nowhere else to go. But these voices have been aberrations. Most critics still make us believe that payday loans are bad.

A few alternatives to payday loans have come up now and then, but none of them have worked. For all practical purposes, there is simply no alternative to payday lending anywhere in the United States at this time. read more


Lawmakers across many states in the US have passed a number of regulations over the last few years severely limiting or preventing payday loans. Sometimes also referred to as quick cash loans or installment loans, there has been serious repercussions as a result. Quite a few states have completely banned these loans, saying that this leads to debt trap, though many analysts and experts aren’t quite sure about this conclusion. In many places where severe limitations have been placed, the number of payday lenders has come down drastically.

However, in spite of all these measures, payday loans have remained popular for years, revealing a fundamental need for these cash advances for lower income group people, and their popularity among the masses. For instance, in Alabama, people took more than 2 million such loans in 2015, with the average loan in the state being $326. 246,824 borrowers in the state approached lending agencies for money. These loans remain popular all along the Mississippi Delta. read more


A man from San Diego, Doug Farry, has been meeting human resource managers, chambers of commerce, and city councils relentlessly for almost two years now, explaining to them what he knows from his experience as a former banker – many workers are forced to live from one pay check to another, and often face acute financial troubles in between. Doug runs a start-up that offers payday loans to employees with a steady job and salary, but people who could do with some additional funding in times of need or when they face an emergency.

Doug Farry has worked in a bank at Minnesota for many years and explains how the conventional banking system falls short of offering a real and practical solution to people who are just a little bit short of cash. Banks and other conventional lending agencies are simply not good enough, he says.

They are not interested in issuing a $1000 loan for a couple of weeks. The earning is too less, and the processing costs are too high for the banks. There is a real demand in the market for these types of loans, but the conventional lenders don’t offer a solution. read more


The economy works on credit. In other words, you need good credit for virtually everything – a student loan for paying the college fees, mortgage loan for the house, a car loan for that new automobile. Good credit will be the make-or-break difference.

How the Credit Score Affects Our Lives

All of us have a credit score, which determines our “creditworthiness”. There are credit rating agencies that evaluate and come out with these scores. It is a three-digit score that is used to determine whether your loan applications are going to be approved or rejected. But creditworthiness can sometimes go even beyond that. For instance, the credit score is used to decide how much you pay towards insurance, whether you can rent that nice apartment, and even whether you will get that job or not. Yes, employers, landlords, and insurers can all access your credit score before deciding.

A good credit score can thus make a huge difference, even if you are not actively seeking a loan at this time. Bad credit will indicate that you are a risky bet. Good credit, on the other hand, is an indicator that your life is on the right track. It’s that important. read more


There are two clear viewpoints on payday loans. Many individuals are convinced that these short-term loans are the way to go because it helps them stay liquid when they are running a little short of cash. Plus, they can always turn to these cash-advances in an emergency such as the car breaking down, sudden house repairs, or medical bills. There are millions of such people across the United States who is approaching payday loan companies for these short-term cash advances.

Then there are the critics who believe payday loans are a debt trap as a large section of the population are not able to pay back on time. The statistics, though, tell a different story. These loans are not a problem for a large majority of people, as they always pay back on the due date. But having said this, there are always a few individuals who cannot repay the loan on payday, mainly because of financial mismanagement. But that happens with any type of loan, and not just payday.

However, we will still like to work with those who might face problems in repaying the loan in time. So here’s a guide that should help them. read more


Statistics of the present banking system in the United States will shock most people.

Twenty-seven percent of American homes, which come to one in four, don’t have access to the complete range of banking services. 7 percent of all people in the US are “un-banked”, which means that they do not have access to insured bank accounts, or any banking services. Plus, about 20 percent of homes in the United States, are “under-banked”, which means these people have an account at the bank, but don’t use banking systems for transactions or their credit needs.

Leading Presidential Candidates Raise Financial Inclusion Issues

The issue was raised briefly during the recent Presidential election, with both the leading candidates promising swift action to rectify the situation. But the situation is nothing new. Experts had pointed this out even after the economic turmoil of 2008 and asked the administration to prioritize financial inclusion.

But nothing much has changed, though almost a decade has passed since then. Payday loans or quick cash loans have remained the best bet for a large section of these un-banked or under-banked Americans who need credit. Yes, a few alternatives have been launched from time to time, but nothing has worked. For a large section of the population, payday loans remain the only viable and practical option. read more


It is important to know the features and benefits of bank loans and payday loans to know the truth.

Payday lending has been receiving bad press over the last few months. Some people are claiming that these loans charge outrageously high interest rates. Further, it has been pointed out that the payday lenders follow predatory practices that can push their consumers back against the wall and send them spiraling down the debt tunnel from where it is difficult to escape. The entire industry of payday lending has faced a lot of criticism on these counts.

Is the industry really this bad? If it was, then why do the millions of Americans still prefer these loans over other credit sources?

Here’s the reality – stack up the costs of payday lending, and compare them with the fees of traditional banks, and you will find a different villain. It appears, the millions of Americans are not wrong, after all.

The Payday Loan Details

Most payday lending agencies offer short-term personal loans where the average cost is between $12 and $22 for each $100 you borrow. In other words, the interest rate is usually between 12% and 22%. The actual loan amount is rarely above $1500 or $2000 max. These are short-term loans where you have to pay it back within two or three weeks, after the next pay check arrives. The money is deducted automatically from the bank account that you have provided while applying, and the account where the lender had deposited the amount. read more


There is a problem with our banking system and conventional lenders. Sure enough, there is a lot of money in the banks, and there are many individuals and businesses that want to borrow this money for business growth or personal requirements. It might be easier for businesses, but how many individuals, a little short of cash, will get the money they need in an emergency?

It’s like being bullied at school for low grades. You don’t feel good when you are snubbed because you lack something, especially low credit score. This is why so many people in the United States are still outside the banking network.

Many Traditional Lenders Deny Small-Dollar Loans

Most traditional lenders will reject applications for short-term installment or payday loans, irrespective of how many times you visit the bank, or what you say and do to convince them. It simply doesn’t work. Then there are banks that won’t even accept applications for a small-dollar quick-cash loan, because the amount in question is too small for them. They are simply not interested. read more


According to the findings of a survey, about a third of all students have to depend on payday loans, credit cards, and overdrafts to fund their university education. Many of them were depending solely on cash loans. The Future Finance research discovered that as many as 31 percent of the students have to depend on these sources for covering their university expenses. The study was carried out among 1,000 full-time students.

63 Percent Students Taking Payday Loans Understand Financing Matters

Researchers also discovered, after talking to these students, that more than a quarter did not consider a payday loan to be a kind of debt, because of its short-term nature, and the small amount borrowed. Interestingly, 63 percent of the students who were questioned said they have good knowledge of finance, while the others conceded that their financial understanding could improve.

For instance, many of these students did not know what the Annual Percentage Rate or APR stood for. However, these students were a minority. Most of the researched students had a decent understanding of finance. Payday loan critics have often said that one reason why there is such a huge demand for these loans is because a big section of the population does not understand finance and how to manage money efficiently. That is clearly not the case, as evident with the findings of this research. read more