Imagine that you run out of money in the middle of the month and your child falls ill. You need cash immediately for medication. You are in a state of panic and wonder how to arrange for the money. Your savings are already spent and your salary is not due for another two weeks. There isn’t anybody particularly close from whom you can borrow money. Who will give you a small loan, you wonder. Well, there are payday loan lenders who would lend you the required amount and more importantly, they will hand it to you instantly. In other words, you can get an instant payday loan.
But you are still worried. You have taken loans from banks in the past which are yet to be repaid. A credit check by the lender will reveal your credit history and he may refuse to give you a loan. Don’t worry on that count- a lender of an instant payday loan is not concerned with your past and will not conduct a credit check. He would refuse to grant your loan request only if you do not have a regular job. Your getting a regular salary is the main criteria based on which he would grant you the loan.
Are you still unconvinced? You feel that looking for a payday loan lender, filling a loan application, submitting the necessary documents and getting the loan approval would take a lot of time and your need for cash is immediate? Rest assured, there is no cause for worry.
So you know now that an instant payday loan is the best solution in an emergency. The only drawback is the high rate of interest. Payday loan lenders justify these exorbitant rates by arguing that they are granting loans without security to people from low income background who may have a bad credit history. The borrowers may have taken many other loans and repayment may either get delayed or may not happen at all. The lender needs to be compensated for this loss and charging high interest rates is his way of safeguarding himself.
Regulatory authorities however say that instant payday loan lending should be strictly regulated as these loans exploit the poor by taking advantage of their immediate need for cash. Many state governments in the U.S had banned these loans. Others have strict rules regarding lending rates and amounts.