Quick Loan

The Quick Loan Industry

The quick loan industry has been unfairly called predatory by critics who say that the loan fees are too high, that these lenders take money from hard-working people, that they make billions in profits, and that they trap unsuspecting people into debts that they find difficult to pay off. All of these criticisms have been openly and honestly responded to by the quick loan industry.

First, the loans are short term. They are to be paid back in one to three weeks. The loan fees are expressed as amount per $100 loaned. The fee can sometimes have an APR up to 400% but while this is high for a long-term bank or credit union loan, it is not applicable for loans due in less than a month. If you are charged $15 per $100, then your loan fee is 15%. To get up to 400%, you'd have to extend the loan over and over again for 26 start pay periods. Since this is not practical or allowed by law, it is real not relevant. When the loan is repaid, however, you've received a quick loan at a reasonable rate.

This leads to the charge that quick loan companies make high profits at the expense of their low-income customers. In fact, lenders make about $1.08 per $100 loan. The fees involved for bounced checks, late credit card payments, or utility reconnections are often far more expensive for a similar loan amount. If borrowers use the quick loan to pay a credit card bill, they've actually saved themselves money in increased credit card fees or having their card interest rate increase because they are late on their payment.

Quick loans are designed for people who may have had issues with their credit but are working full time. They sometimes need a loan to help out with bills, food, rent, or emergency expenses. They are not unsuspecting sheep being led to the slaughter. All of the information concerning quick loans is easily accessible. This information is easy to understand, and it is thorough. If a borrower has trouble understanding the terms of a loan, the loan company will provide assistance to explain the terms. All of the fees and rates are outlined clearly. Many quick loan companies do not encourage customers to extend loans, which would become costly if done repeatedly. Some states have outlawed quick loan extensions also. It is made very clear to the customers that these are short-term loans.

As for the customers, they're not the uneducated people that critics portray them as. A vast majority has high school diplomas, and many have gone to college. They are hard working people who don't earn enough to cover expenses at all times. Most pay off their loans on time and use them to avoid or get out of current debt. The quick loan industry has proven itself to be a trustworthy option for many Americans in times of need.

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