People - not American, not Europeans, not Asians - but all people fall on financial hard times from time-to-time.
In the past, those with immediate, unexpected financial issues had limited options in securing a short-term loan. They either had to turn to friends and family, sell off personal assets or fight with their bank to get a quick personal loan.
However, this latest economic crisis changed all that and even further reduced the options that these individuals had when seeking needed money.
Friends and family no longer have the resources to help. Personal asset values have declined and thus provide no value. And, banks just are not making loans to anyone - let alone unsecured personal loans - especially for those that have minor credit …show more content…
use payday loans each and every year. Further, according to Consumer Focus; the number of people using payday loans [in the U.K.] has increased fourfold since 2006 to 1.2 million people, borrowing a combined £1.2 billion (nearly $2 billion U.S.). So, it is not just in America.
But, why are so many people turning to these short-term personal cash advances?
Here are three chief reasons that alternative money sources, like Payday loans, are becoming the new norm.
1) As stated, banks aren 't lending. They claim far too many un-creditworthy borrowers or lack of repayment ability or declining collateral values. All things that banks and similar financial lenders state that make lending too risky.
(Many think that banks are just looking out for themselves and have no concern for the financial needs of their customers or communities).
So, people turn to payday lenders where there is no concern about credit scores and since these loans are unsecured, there is no worry about collateral values. If you can simply make the payment on your next pay period, the loan is approved, you get funded and satisfy your current financial …show more content…
You have to pay rent, have a vehicle to get back and forth to work, utilizes prices are increasing and food costs are going through the roof. Now, paying those standard living expenses is not such a bad thing if you are employed in the job of your choice.
However, nearly twice those that are unemployed are underemployed. Meaning that they still face those high standard of living costs yet do not earn the income needed to cover them.
Think about the recent college graduate that not only has to repay his student loans but has to live somewhere as well - all while earning minimum wage. Not likely to happen and not a good situation when an expected financial event crops up.
Or, the 35 year who was earning $35,000 a year over the last ten years and has a mortgage payment, two car payments, high utilities bills and still has to feed a family of four plus (pet included) - not to mention the thought of future college tuition bills for the children that need to be saved for right now.
When this person gets laid off or downsized and can only find a job that pays half of their previous income, trying to deal with unexpected financial issues can be more hassle then they are
In the past, those with immediate, unexpected financial issues had limited options in securing a short-term loan. They either had to turn to friends and family, sell off personal assets or fight with their bank to get a quick personal loan.
However, this latest economic crisis changed all that and even further reduced the options that these individuals had when seeking needed money.
Friends and family no longer have the resources to help. Personal asset values have declined and thus provide no value. And, banks just are not making loans to anyone - let alone unsecured personal loans - especially for those that have minor credit …show more content…
use payday loans each and every year. Further, according to Consumer Focus; the number of people using payday loans [in the U.K.] has increased fourfold since 2006 to 1.2 million people, borrowing a combined £1.2 billion (nearly $2 billion U.S.). So, it is not just in America.
But, why are so many people turning to these short-term personal cash advances?
Here are three chief reasons that alternative money sources, like Payday loans, are becoming the new norm.
1) As stated, banks aren 't lending. They claim far too many un-creditworthy borrowers or lack of repayment ability or declining collateral values. All things that banks and similar financial lenders state that make lending too risky.
(Many think that banks are just looking out for themselves and have no concern for the financial needs of their customers or communities).
So, people turn to payday lenders where there is no concern about credit scores and since these loans are unsecured, there is no worry about collateral values. If you can simply make the payment on your next pay period, the loan is approved, you get funded and satisfy your current financial …show more content…
You have to pay rent, have a vehicle to get back and forth to work, utilizes prices are increasing and food costs are going through the roof. Now, paying those standard living expenses is not such a bad thing if you are employed in the job of your choice.
However, nearly twice those that are unemployed are underemployed. Meaning that they still face those high standard of living costs yet do not earn the income needed to cover them.
Think about the recent college graduate that not only has to repay his student loans but has to live somewhere as well - all while earning minimum wage. Not likely to happen and not a good situation when an expected financial event crops up.
Or, the 35 year who was earning $35,000 a year over the last ten years and has a mortgage payment, two car payments, high utilities bills and still has to feed a family of four plus (pet included) - not to mention the thought of future college tuition bills for the children that need to be saved for right now.
When this person gets laid off or downsized and can only find a job that pays half of their previous income, trying to deal with unexpected financial issues can be more hassle then they are