Are payday loans that bad?

Payday loans are short term loans to pay a bill off or a ticket that can’t be afforded but then paid back in a short period of time. In the products it discuss the way they work, why we should or shouldn’t have them, and what can make them better or run better for people. I think it’s important for people who don’t have anyone to help them out that they can fall back on something like this.

The general requirements for someone to get a payday loan is having a job to support that you have a way to pay it back and showing them your bank statements, having a checking account so that way you can write a check to the payday loan just if you don’t pay them back which is also used as collateral, social security card to make sure that the person is a U.S citizen and finally, your identification card to prove who your are. Altogether it’s not very much information from someone to give money to, it’s not very much money at one time.

In the podcast it states that about twelve million americans use payday loans. Also, most of the people that use them have a yearly income lower than forty thousand dollars. Most of them fit in lower class and don’t have a college degree or barely made it out of highschool and younger. Most people who get a payday loan are young white females but now it’s among all colors and races. I think is a lot of people who get a payday loan that the government should try to find the statics as well to try to help them so they don’t have to get a payday loan than just cut them out. The government doesn’t want people to use them because of the risk but most people who even use them are satisfied with the outcome. The people who get them and don’t have enough to pay back is there own fault because they knew the terms, side note most of the people who can’t pay back the payday lenders are people who use drugs. I think payday loans could have better standards but for the most part a lot of people use them.

Payday loans can become a disaster because people who don’t use them correctly obviously don’t understand things financially because it is clear that its short term and then people get stuck and roll over again and again and lose a lot of money for one small short loan. People who use them varies with minorities depending on their background or if they were educated or if they use drugs too.

If the interest rate of a payday loan is capped t thirty six percent they would have no choice to shut down because they wouldn’t being making any profit. The whole point of the business is to get people to pay them off fast or have to pay more, it might hurt some people but really doesn’t do much if they use it right. I Think maybe they should restrict people who use drugs or have more information to say no because then it wouldn’t make the poor more poor or in debt. The government knows by knocking the cap off by that much will shut them down so if they want that why don’t they just cut them off altogether.

Washington and oregon conducted that when payday loans were sound military bases they performed worse and started to decline and also constantly worried about the debt more than not having them, after this payday loans closed around the bases so there wouldn’t be the issue in the first place. Although most people are happy with the result and still use them when needed.

I think the payday loan industry need to make a few changed on who to give loans to and have more requirement on people than they do there system because the system works and they make money it’s just the people who don’t use them correctly. Maybe, for first time users they could go over how they work and how bad it can get someone into debt if it doesn’t get paid. Another idea could be to drug test and to see if the person make enough and can afford it while still paying other bills in the process. The government should step in to help them solve the solution rather than be against them and cutting them out completely because they help people overall with debt and that’s what the purpose of the business is for.