Why are Payday Loans Considered Predatory?

Those that have seen those payday loan companies or have heard the ad that they are boasting offering the person the chance to only pay a dollar in interest for borrowing their own money, then they know that these offers are some of the most tempting that they are going to find when it comes to getting the money that you need now. However, most people should remember that payday loan lenders are frowned upon and are more times than not looked at as a predator against those that are simply trying to make ends meet. But why are they considered a predator among the loan world?

For starters since they do not require a credit check, many people look at this as being irresponsible lending. They are giving people a chance to get money that they may not be able to afford in the long run anyway, which is only hurting the person in the long run. Though this is one of the biggest reasons that so many people do not like to use payday loans, there are several other reasons.

For example, the fact that if the person does not pay the loan when it is due, the lender then gives them more time to pay. This is something that most people would see as a good thing, however, when adding on the high interest rates it is something that people do not like. When this happens, the person may find that they are actually paying almost double of what they borrowed since they were late with the payment. And since most people think that the lender cannot take anything away from them, they are tempted to not pay this. However, the lender can file against the person can get their money in one way or another.

Other people view these payday loan lenders as those that are going to basically rip the person off. And when you look at the fact that the person may be paying almost double in interest rates and having a very strict time frame in which they can pay this money back or they end up having to pay even more in fees and interests, then the thought of being ripped off by one of these companies is not too far fetched. Most people are going to find that if they use these companies and they do not read the fine print that they are going to get ripped off in the end.

However, probably the main reason that so many people view these lenders are sharks that are out for blood is because they have seen someone go through the process of getting one of these loans and they have seen what they have gone through. The person can tell others until they are blue in the face about the dangers of using these companies, however, nothing will get the lesson through people's minds in a better way than actually seeing it happen to someone that they know.