Payday loans have been the savior for many of us for decades already. When you run out of money in the end of the month and you can’t get financial help from family, relatives, friends and colleagues, payday loans have been the answer.
Payday loans get a lot of critics also, and a lot if is reasonable. The interest rates are high and governments throughout the world have done their best to limit the maximum interest rates by law. The wild west isn’t so wild anymore, but the interest rates remain high compared to traditional personal loans.
Will we see more limitations for the interest rates and terms of agreements in the future of payday loans? That is unclear at the moment in many countries. The government officials worry, as read in media, that many people will still run into financial trouble by taking payday loans and cash advances. There is pressure to criminalize all the payday loans, but it is easier said than done. In the end of the day, payday loan is a normal personal loan. The main difference is high interest rate. We have also seen bigger companies (banks and even flight companies) to start offering such short term loans.
Is that a sign that payday loans are here to stay, that the big companies have started to offer high interest short terms loans? Bigger companies make effort to do cost analysis, return on investment analysis, before they run into any new business. We can realize that if they make such calculations and still come to market, it means that they highly trust for the future of payday loans. Bigger companies are also closer to government officials, so they get the latest news and rumors. That’s why it’s a good signal.