The payday loan industry has been slammed in the press for charging excessive interest, but the truth is, the lenders charge a fair fee for the exclusive service they offer. If you think about it, where else can you get a short term loan within a few hours? Where can you get an unsecured loan if you have bad credit? Payday loan lenders are taking a risk by offering loans to people who have difficulty getting loans elsewhere. So why then are they being slammed by the press?
The problem does not lie with the lenders, the problem is with the borrowers. A payday loan is a short term loan meant only to bridge the gap between paydays in a cash emergency. And lenders advance money in most cases in good faith without even doing a credit check to ensure the borrower's creditworthiness. With the result, many borrowers fail to repay their loans on time, forcing the lenders to charge extra fees which then make the loan costly.
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