Payday loans are good for millions of people: why?

Banks are usually targeted by the department of justice and regulators of the state government for the wide variety of doubtful financial services provided by them to millions of people like the lenders of online payday loans. The efforts done by government to find out the violators of federal laws and people involved in fraudulent transactions are really appreciable. But still the consequences of many people who depend on some legal short term lenders popularly known as payday lenders for their financial needs are the matter of great concern.
Getting payday loan is very easy as you can go to a payday lender to get money to meet up your short term urgent financial needs. The payday loan benefits include the availability of loan from $100 to $500 to be payable by the next payday if you have a job, proper identification and checking account. You only have to provide a written authorization or write post-dated checks for the amount of payday loan along with some predetermined fee in favor of your payday lender. You can either repay your payday loan to the lender in person or your lender will initiate an electronic transfer of funds from your account or cash the check provided by you. In this way the transaction gets completed within few minutes. But these payday loans are offered by very few numbers of banks because their cost of transaction is very high as compared to other personal loans.

Millions of Americans in middle income group depend up on their paycheck for their living expenses. Most of them try their best to manage their financial obligations within their limits. But they have to go for some short term financial arrangements when some unexpected and unavoidable financial need arises like the bill of the doctor, repair of badly damaged roof etc. In order to get short term financial help some of them approach to their friends and relatives. But in most of the cases their friends and relatives refuse to help them at such time of need due to various reasons. At this time payday lenders prove to be the best option for getting short term loan at their terms.
Though payday loans are criticized by the financial critics on the grounds of the high rate of interested charged by the lenders but still they are the best option at the time of financial emergency. Most of Payday lenders charge a fee loan of two weeks. It is little high but the fact behind this high percentage is that these loans are offered for few weeks only. Though the APR of the payday loan seems to be little high but it is still it is much less than the fee you will have to pay for late credit card or mortgage payment or on a bounced check. So to avoid such situation it is worthwhile to avail a payday loan.
It is worthwhile to pay some cost for a payday loan in comparison with the loss of income caused by losing job or not repairing your car in time. The terms and conditions of the payday loan including APR and the amount of any other fee is disclosed by a good payday lender in dollars before its approval. Furthermore these payday lenders are regulated and supervised by the new federal Consumer Financial Protection Bureau along with state agencies so that they may not overcharge any fee from the borrowers. These agencies keep an eye on the working of these payday lenders per the rules and regulation followed by the banks.
In order to avoid these regulations some of the payday lenders set their offshore operations to offer online payday loans to the borrowers, beyond the control of the regulators. The efforts of these regulators for trying to stop such transactions by refusing their access to the banking system of the state are praise worthy. But while accepting these short term loans the bowers have to be cautious about the consequences of taking them from a lender other than banks. At the time of economic financial crisis it is one of the important points to be considered while taking payday loans as you can qualify for a bank loan only if your credit score is trustworthy.
In order to control such situations the banks are advised by the state regulators to deal carefully with their customers lending payday loans to know whether the federal and state laws are followed by them or not. For this purpose banks are advised to launch anti money laundering programs, establish written compliance of the regulations, providing them valid authorization and making them follow the best practices of trade associations for transferring funds authentically. The bank is supposed to be working with a wrong customer if a payday lender cannot give affirmative response to the banks queries in this regard.
Some people are of the view that enormous losses are imbedded in the portfolios of payday loans as most of these loans are actually never repaid, most of the times these loans are rolled over again and again. Though there is no state law to control these rollovers but some of the states and even private payday lenders have limited the number of such rollovers to stop their increasing losses.
The considerable diversification in the portfolios of payday loans has improved the risk of payday lending by including them into the fees in terms of dollars. Some of the efficient and reputable payday lenders can still earn attractive profits through payday lending if they can afford to arrange sufficient capital and maintain reserves to face the losses in payday loans. The regulators, on the other hand, are making various changes in regulatory settings so that they can protect the welfare of the under-banked borrowers before they are compelled to face the consequences of the payday loan.
Thus the favorable experiences of millions of people about this short term lending instrument have proved that payday loans are good for them and sites like www.paydayloan123.co.uk also offer them good services.