History of Payday Loans – Why They Appear?
Microcredits appeared at the end of the XX century. They were invented by Muhammad Yunus, a native of Bangladesh. In 1983, he opened a bank where people could take out a small loan to start their business. Thus Yunus sought to overcome poverty. The bank did not require written confirmation that the borrower would be able to return the funds. However, those who wanted to get loans were divided into groups, within which people vouched for each other and thus guaranteed loan repayment.
Yunus even received the Nobel Prize for his idea in 2006. But along with it, criticism appeared. After all, people did not use loans to start their own business and improve their lives, but spent them on gifts or visits to the doctor.
This business idea has swept the whole world. Nowadays, it is very popular even in countries with strong economies. The UN General Assembly supports the development of payday lending to support the world’s poor.
Payday loans have a number of advantages over conventional bank loans.
To issue them, you often do not even need to leave home – organizations for the most part do not have a physical representation and work only online. To get the service, a passport or a copy of it is enough, whereas in traditional banking institutions you will have to provide proof of income, identification code, and the like. Online payday lenders sometimes do not even ask for the contacts of the guarantor and do not assess a person’s credit history.
Payday lending services in today’s time
Realizing what awaits them during the loan processing in the bank, a large number of Americans did not want to be credited at all for a long time. But still payday loans are very popular nowadays. And despite the fact that the interest on such loans is slightly higher than that of banks, their advantages constantly attract customers:
- the chances of getting a negative decision in a microfinance company are much lower than getting it in a bank. Even if you don’t have an ideal credit history, the probability of getting a small loan is much higher.
- the process of registration and confirmation of the application lasts a very short period of time, in any of the microfinance companies, all this in a complex takes a maximum of half an hour. It is also possible to apply for a loan online, absolutely excluding contacts with the staff.
- the minimum package of documents: TIN code, passport and the presence of labor income (it does not have to be official).
It is also possible to close the loan debt simply: you can do it online, right at home, or in cash, if a payday lender has an office in your city.
- it is not necessary to explain for what purpose you want to take out a loan, you can spend these funds on anything.
Why and when do I need a payday loan?
Given the short time for which payday loans are issued, they are often taken out for various needs before they receive a salary. For a very large number of people, this is the only chance to timely pay receipts for utility bills, tuition, in a short time to find the necessary money to buy goods at auction or to purchase a gift.
Very often, payday loans can save you from accidental embezzlement, for example, for treatment. It is very convenient that this service is available to customers around the clock and even at night you can borrow the right amount of money.
Many companies operate throughout the United States. If you went on vacation or went on a business trip, but you did not calculate with the money, you can easily take out a payday loan, and repay it when you come back home.
Category: Online Loans
Tags: cash advance, finance, payday loans, small business