Who Applies for Payday Loans?

There are a lot of companies out there that offer payday loans. You may have wondered why that is. After all how many people could possibly use them given what we know about what a bad way to borrow money they are. The surprising answer is that there are a great many people who have found it necessary to use payday loans. So just who is it that is applying for all of these payday loans?

The answer to who applies for payday loans is almost anybody who needs money before their next paycheck. That being said the people who apply for payday loans are overwhelmingly low income earners who in many cases have no other options when it comes to borrowing money. In general if you have other sources for borrowing money you should use it instead of taking out a payday loan. Since most people who have high incomes and good credit do in fact have other options they rarely apply for payday loans. This is why overwhelmingly it is low wage earners.

Most people have an easy alternative to payday loans right in their wallet. A credit card is a much better option than a payday loan. With your credit card you can usually pay directly for whatever you need. However, like Jeff Mueller says; if you do need cash you can also get an advance with your credit card. The result is that the people who use payday loans are people who are unable to get credit cards. Again this tends to be low wage earners and people with bad credit. This is one of the reasons that a lot of people are unhappy with payday loans.

There is a feeling amongst a lot of people that payday loans are a predatory lending practice. The reason that they feel that way is that they come with very high fees that are clearly designed to take advantage of the people who have no other choice when it comes to getting a loan. The result is that the people who can least afford to pay the hefty fees that are involved in taking a payday loan are the ones who have to use them. Clearly this is a problem that needs to be addressed.

Because there are so many people who think that payday loans are predatory a lot of states have started instituting laws to either outlaw them or severely restrict them. One of the reasons for this is that it has come out that a large percentage of people in the military are in financial trouble because of payday loans. There are not many politicians who are going to sit by and allow members of the military to be exploited by the payday loan companies. This has also tended to call attention to the problem and rally support behind regulations to restrict payday loans.