In Defense of Payday Loans, Cash Advances, and Car Title Loans

Written on August 3, 2012 at 12:41 pm - By Randy Hauser

Payday Loans | Cash Advances | Car Title LoansThere doesn’t seem to be a day that goes by that someone publishes an article or voices his or her opinion about payday loanscash advances, or car title loans.  As if a struggling consumer needed yet another reminder about the dangers of these loans. Driving home the downside of alternative solutions to finding immediate cash is not the sort of thing that really helps the unbanked or those unable to qualify for an unsecured credit card or bank loan.

The fact is that tough economic times have caused people in a financial bind to do things they might never have done before.  And in those cases, payday loans, cash advances, and car title loans may be the only workable solution for them in finding the necessary funds until they can get back in the groove.  What’s more, there are those individuals who are living paycheck to paycheck when they suddenly get stuck with a financial emergency.  That’s when getting hassle-free fast cash makes a lot of sense.  For those who continue to bash payday loans, cash advances, and car title loans, they should also hail the loads of loan lenders out there who are licensed and also conduct legitimate businesses.  They provide a service for the many individuals that have had to opt for smart-money alternatives for finding available credit in times of financial distress, especially nowadays.

Customers are hitting the internet more and more because they know that short-term loans make sense for them.  And applying online is safe, convenient, and easy. Given the increasing growth and popularity of payday loans, cash advances, and car title loans, it might be a good idea for critics to step back and acknowledge that there are still many people out there who need some relief to help manage short-term debt.  And to get by due to rising costs, rather than rising salaries, and government cutbacks.

This is what you should know. Consider that the majority of borrowers use such loans in one or two ways, or both.  Critics of payday loans, cash advances, and car title loans rarely take into account that these loans can be very helpful in an emergency.  Most often they are the only option left to consumers who need immediate cash, and who cannot qualify for enough credit through traditional channels such as from banks and credit cards.  Those consumers use payday loans and cash advance loans as cash in advance of their next paycheck.  The fees are relatively cheap if you pay your loan back quick on your next pay date. What’s more is that payday loans and cash advances are a sure way to keep on top of recurring monthly expenses.

The smart-money deal is to continue to pay them back quickly.  Here’s an example of how one of many consumers has relied on monthly cash in advance to stay ahead.  Assume that take-home pay is approximately $700 bi-weekly.  In this economic climate, that’s not enough to pay for all of the expenses, such as rent, utility bills, auto insurance, groceries, and etc.  This consumer, let’s call him John, found a smart way to use a payday loan or cash advance to keep afloat.  He pays a $40 fee (Florida Rates) on a $350 payday loan leaving $310 to use for groceries, utility bills, and any other expenses that pop-up.  He figured out that his take-home pay would usually cover the cost of his monthly rent.  John just needed an extra cushion to make ends meet every month.  Now he can rest easy and know he has enough to live on and keep up with rising costs of electric and other utilities that the government is constantly giving approval to increase rates. Basically, it costs him $80 a month to keep up with rising costs and he now has a little more than $1710.00 a month cash flow verse $1400.00 a month without the loans.  Not so bad for a person just trying to make it.

Then there is yet another option.  For those borrowers who have a one-time major unexpected expense, a car title loan, which is thought of as a longer term loan, is typically spread out in convenient installments over the course of a 7 to 14 month payment plan.  It’s simply a longer-term choice when dealing with a financial crisis.

Wouldn’t it be a great thing if our world were perfect and we could live without financial distress or any other stressors invading our day-to-day lives.  For many years, many of us could have said we were living the American Dream, or at least trying to.  Many others looked forward to getting closer to reaching those goals.  For years, for some, money and credit were not a problem. While for others, it continued to be tougher, more often than not.  For some, but not for others, it was possible to have several bank credit cards that were used as a bridge when it was necessary to take care of an unexpected expense.  Or even just to pay for necessities.  Rents and utilities seemed to be more affordable, and in a pinch, you could overdraw a checking account without humongous bank charges; bank and credit card fees were lower.

So what happened.  Lots!  Suddenly, the world seemed to have changed.  Everyone began to feel the brunt of the economic meltdown.  For those who were struggling, the effect seemed to have been worse.  To keep the family’s budget on track, people dipped into their savings and used what they had to cover expenses that continued to rise.  And still are.  People began to limit those extra expenses that they could do without.  Many chores just became backyard weekend to-dos.  The prices of gas, clothing, food, and other goods rose dramatically.  And still continues to.

When common sense takes over, a payday loan, cash advance, and a car title loan are just another way to stay on top of financial problems when there is no other way out.  So you always want to be on the lookout for potentially unlicensed loan lenders.  But for a short-term bailout from financial distress, it’s become the “New Normal” for finding the credit you need, when you need it the most. Contact us today for a payday loan, cash advance or car title loan from a licensed loan lender you can trust!