| A Payday Loan is basically an advance on the wages | | | | The main argument or moral justification against |
| you expect to receive at the end of the month. They | | | | Payday Loans is the extortionately high-price levied |
| are a very useful loan product when it comes to | | | | against poor borrowers who take out these loans. The |
| paying off emergency expenses or purchasing a new | | | | question that arises from this point, however, is: how |
| holiday. It is not just people from low-income | | | | are lenders to offer credit to low-income borrowers |
| backgrounds who opt for Payday Loans, people from | | | | without raising the interest rate above that offered to |
| all walks of life have chosen to use a Payday | | | | more qualified borrowers? |
| Advance when they need a short-term solution to | | | | With every risk there is a reward however, and |
| short-term financial problems. However, because of | | | | Payday Loan Company's must protect their own |
| the burgeoning popularity of Payday Advance Loans, | | | | interests while following sensible lending practices. |
| a number of misconceptions of arose and this article | | | | However, despite these accusations, the typical |
| will attempt to address some of these misconceptions. | | | | amount owed by the average borrower is not |
| The interest charged on Cash Advance Loans is high, | | | | insurmountably high; in fact a typical on Payday Loan is |
| but for a reason. While many people from all types of | | | | £25 for every £100 borrowed. This is higher than |
| backgrounds opt for Cash Advance Loans, the | | | | average, however still within the reach of the average |
| majority of people who apply are actually from | | | | borrowers. The main problem exists where an |
| lower-income households and poorer segments of the | | | | unqualified borrower is accepted for a loan and then |
| population. The popular argument is that Payday Loan | | | | defaults on said loan. This can lead to a situation |
| Companies target these low-income borrower's as the | | | | where the loan rolls over for a month, which can lead |
| most susceptible in society to their persuasive tactics. | | | | to the borrower pursuing a path of spiralling debt. |