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Payday Loans Online Versus Personal Responsibility

There are differing opinions on whether the payday loans online industry should have more government regulation or abolish short-term loans. Even still, some believe more personal responsibility needs to be demanded.

Different Thinking to the Payday Loans Online

The conservative party has argued for the personal responsibility component to online payday lending. Likewise, the liberal view is that government control should protect the economic classes from predatory lending tactics should be exercised. Consumer advocates will agree and take on the fight of the democratic point of view. More government control will protect consumers from high-interest rates, short-term loan fallouts, and payday loan store locations. Taking it one step further, many consumer advocates would prefer that these types of loans should be gone altogether.

Let’s look at the counter-arguments of the horrors of payday loans online. The lenders and conservatives would like to take a closer look at the fine line, which separates personal responsibility and government control. How much does the government control without discrediting the intelligence of the borrower? Just because most borrowers are low income, it does not mean that they do not understand the terms of the loan. Potential loan borrowers have every opportunity to ask questions and seek advice before signing the cash advance loan contract. Do borrowers need someone holding their hand to make a financial decision?

Online Payday Lenders Considerations

Payday lenders do have a vested interest in keeping their loan policies to make the company profitable. They have to consider their risk of loaning to the high-risk population. Of course, they want to protect the revenue they make for high-risk loans. It is a business. The loans are freedom of choice, and the backers of the payday loans online industry have kept the option to obtain a short-term loan open to options for various consumers.

There is a need for emergency financial solutions, which have kept payday loans online, helping people with small financial troubles. Negative reports talk louder than positive stories.

What is Positive about Payday Loans Online?

  • They have helped many consumers get out of a money problem before it becomes big.
  • An option for money when most other financial doors have been closed.
  • No hassle loan application
  • Bad credit is not an issue.
  • Fast money

Where Can the Borrowers Turn?

It is a choice. No one forces a borrower into opting for a payday loans online. Someone looking for a short-term loan has usually already suffered some credit damage and is looking for a new source to help them out. The loans are high risks that most financial institutions would never take. If the payday loans online were not available, where would the consumer turn to get the money? Many advocates for the industry are fearful that loan sharks would gain their business. Illegal lenders are completely unregulated with lending and collection practices. Some payday loan companies do not follow state regulations that cause alarm, but cannot be grouped with those who do follow best practices guidelines.

Negatives for Abolishing Payday Loans Online

  • Increase of unregulated payday loan companies; offshore companies. Native American based companies, illegal loan sharks.
  • They are jeopardizing the finances of the many who do achieve success with payday loans.
  • It is limiting the options for borrowers who would struggle to get help elsewhere.

Education for financial matters and the risks involved with payday loans online will help lower the risks for both customer and lender. While the government has chosen to regulate the companies, there needs to be more emphasis placed on the client’s responsibility.

Responsible Lending Can Happen

Many people are in trouble financially and have had to turn to the debt consolidator. A payday loan is no different than a credit card. Consumers can extend their budget by overspending with a credit card. Soon many credit card users are forced to file a bankruptcy. We don’t see the government imposing regulations on credit cards, or canceling their existence altogether. Whether one uses a credit card or a payday loan, one needs to be responsible and only use as a short-term solution. Consumers must learn to exercise their options. They need to be empowered to learn to make wise financial decisions. 

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