Convincing Argument for Payday Lenders

by: Jerry Daniels


I asked him why he felt so negatively about them and he proceeded to tell me that they are scams. I informed him that there are strict laws that payday lenders must follow and there may have been shady lenders when the industry first started, but now things are changing and most payday lenders want to help people, not make money on delinquent accounts.

He also mentioned that they are always in poor neighborhoods. I pointed out the nearest payday lender in my nice, middle-class neighborhood and explained to him that it's simply not the case.

I also went into detail about why payday lenders might be in poor neighborhoods. I told him that a lot of times, the people in low income neighborhoods cannot qualify for traditional loans because of bad credit ratings or too little income to pay long term, big loans back.

I told him that nowadays, payday lenders are offering easy loans to those kinds of people. He then argued that if they are marketing to poor people, the payday industry should know that those people don't have money enough to pay back loans that they borrow in the first place.

Payday lenders do make money on loan extensions and rollovers, but look at it this way. If a person were to take a loan and was unable to pay it back and the fees just piled up, it would cost the lender so much more money to go after that person and collect. It is time consuming and not cost effective. They don't want to push people into bad situations and cause problems.

The other thing I made my family member understand was that those who borrow from a payday lender need to be aware that if they can't pay the loan back with a post-dated check within a couple of weeks, then they shouldn't borrow in the first place. They also need to understand, and hopefully the lender is forthcoming with this information, that these types of loans are to be short-term.

A very good, reputable lender will be more than willing to let a borrower understand what they are getting into and even recommend they don't borrow if they do not have the resources to pay the loan back.

I have taken out payday loans a few times in my life and they were a blessing! I was young and a single parent when I did this. I had car repairs at one point to pay for. I knew I would have just enough money on my next check to pay the loan back.

Then, another time, I borrowed a couple hundred before Christmas. In the three week period before I was to pay the loan back, I worked overtime so that my post-dated check would cover the loan I borrowed to provide Christmas for my son.

I was not desperate for money on a day to day basis. I was intelligent enough to understand the consequences of not paying a loan back, be it from a payday lender or a bank.

It is time for a paradigm shift. For the public to understand that they are responsible for their financial decisions. Spread the word that payday lending is not an evil entity.