Much has been said about the practice of payday loans in recent years. The emergence of companies such as Wonga has sparked a wave of debate and criticism and with the internet providing these businesses a platform from which to advertise their services and seek out new customers, it’s fair to say that payday loaning is here to stay. However, is this such a bad thing for our society? This article will explore the nature of payday loaning.
Many Brits are nothing short of angry with payday loaning, to the extent that demonstrations have even been held, aimed at those affiliated one way or another with such companies. One example can be found in the protests of football fans throughout the country at the English Football League’s advertisement of payday loan company Wonga. The extent of the anger was so strong that in the end, the Football League had to end their partnership with Wonga.
Furthermore, just last month, Premiership giants Newcastle United announced a sponsorship deal with Wonga which will see the payday loan company advertised on Newcastle United shirts. The move needless to say fuelled a lot of anger.
However, is such anger justified? Payday loans do most certainly come with extortionately high interest rates. On top of that, many payday loan companies do not provide sufficient financial background checks for potential customers. This is to the extent that Wonga were recently under serious allegations of lending to children.
A Needed Practice
However, one must not rank all payday loan companies alongside Wonga it must firstly be said. There are a range of other payday loan companies that are much more ethically in tune than Wonga and who do provide sufficient background checking. Take Payday Bank at www.paydaybank.co.uk/pay-day-loans.aspx for example.
Furthermore, those taking out payday loans are aware of the fact that they come with extortionately high interest rates. However, for the most part, their situation is so desperate that they have no other choice but to borrow off a payday loan company and just deal with the interest rates when they are in a better financial situation to do so.
This brings us on to the most important point here. The majority of people taking out payday loans suffer from extremely difficult financial situations and therefore have no option but to opt for a payday loan. In fact, with bank lending being very rigid and near impossible for some, the only other option would be a loan shark; and we all know the problems this would bring.
Desperate times call for desperate measures and while payday loaning may not be ideal, for some, it is absolutely necessary.