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What’s all the Fuss about Instant Cash Loans?
Instant cash loans offered by payday lenders are high interest and short payback period loans. They are convenient for those who need a small amount of cash to cover a temporary cash flow problem and do not qualify for a bank loan or cannot wait to be approved for a bank loan.
Instant cash loans offered by independent payday lenders are not regulated by the same entity that regulates banks, credit unions and other like financial institutions. There are regulations in place for instant cash loan lenders that have been adopted by some states in the United States. The regulations place caps on the interest rate charged, the amount of money that can be lent and the number of times instant cash loans can be extended. The regulations were put in place to protect the consumer against exorbitant loan costs. Instant cash loans via payday lenders are seen by some as taking advantage of the financial vulnerability of customers who need temporary financial help.
There are a number of states that have banned payday loan operations and instant cash loans. They are seen as evil by some even though instant cash loans are sometimes the only option some people have to get a small amount of cash to cover an emergency expenditure. Of course, there are those borrowers that take advantage of the loans and borrow more than they need and have a hard time paying back the loan or do not pay the loan back at all. There are also those lenders that take advantage of the loopholes in the regulations in order to make as much money as they can at the expense of the borrower who is already have financial difficulties.
Instead of outlawing payday lenders and instant cash loans, the lenders and loans should be regulated in every state. If the legislature is not willing to put regulations in place in each state to protect the consumer from financially devastating effects, the banks and credit unions need to step up to the plate and allow a little more flexibility in their lending policies. There are some banks that do offer payday loans, but the banks have also been the most critical of the practice, as well. If the practice is so horrible, why do banks that offer a version of the payday loans, offer them at rates similar to what payday lenders use?
There is a segment of our population that needs help financially and cannot get it. Not all credit problems are due to financial irresponsibility. There are many reasons for someone to have a poor credit score and they include job loss, pay reduction and overwhelming medical expenses not covered by medical insurance and sometimes just pure bad luck. The vast majority of those that cannot get instant cash loans through a payday lender are being punished for the stupidity and ignorance of a few. It is not always the right course of action to ban something that is seen as potentially bad.