There has been a lot of talk over the practice of payday loaning. The understanding that payday loans often come with extortionately high interest rates, plus the lack of sufficient financial background screening for borrowers has put the institution under much scrutiny.
Allegations made to payday loans company Wonga about loaning money out to children has further fuelled anger towards the practice, with feelings against payday loaning being so strong that protests have been made against the advertisement of payday loan companies. However, there is much to suggest that payday loaning may be doing a lot more good than harm in this current economic climate. Here are the advantages of payday loaning, which we tend not to be reminded of.
Protests against Payday
The numbers of cases in which protests have been levelled against payday loaning are numerous. In effect, any company, business or institution that advertises the services of a payday loan company is in essence tarnished by this and prone to face scrutiny. Thus when Newcastle United Football Club announced a sponsorship deal with Wonga, they expectedly found themselves the subject of intense anger and disappointment.
Furthermore, football fans across the country protested against the association and advertisement of the English Football League with Wonga. This anger was so strong that the Football League had to eventually cut all direct ties with Wonga.
In addition, TV show presenters Ant and Dec were criticised heavily for their association with the ITV show Red and Black which advertised Wonga.
Understandable but NOT Justifiable
Taking into consideration the high interest rates involved in the practice, plus the fact that some payday loan companies (namely Wonga) tend to serve almost anyone, anti-payday loaning sentiment is understandable. In fact, considering the practices of Wonga, some payday loan companies should be heavily criticised.
However, not all payday loan companies are like Wonga and most act within the limits of the law and common morality.
Furthermore, from an economic perspective, there is much to suggest that we actually need payday loaning as a society. In such harsh economic times, many Brits are suffering to make ends meet. Bank lending has been somewhat limited in this period of mild austerity and therefore, and thus poor Brits have little option of debt or financial stress alleviation. Payday loans provide a solution that isn?t loan sharking or even drugs or prostitution.
Extortionately high interest rates aren?t ideal, but they?re a lot more ideal than the alternatives for many Brits in financial distress.
LoansSource: http://www.efollia.com/the-advantages-of-payday-loaning
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