After the Great Recession was resolved, a new class of financial institutions began popping up across the United States. These financial services industry competitors frequently take the form of payday loan lenders.
Payday Loans Don’t Require Collateral
Traditionally, ever since individuals began making loans thousands of years ago, lenders often require collateral, or an asset of value owned by a borrower that is signed over to the lender if default comes about. One of the key benefits of payday loans is that they don’t require collateral. This helps an entire class of people, those without nest eggs and who are low-income, secure loans when times get tough.
Overall, They’re Easy to Get
Outside of the aforementioned two benefits, payday loans are easy to get. Many payday loan lenders are open late, if not around the clock. Further, most payday loan providers offer near-instantaneous decisions on applications.
No Credit Checks Are Needed
Lenders pull borrowers’ credit reports to determine credit worthiness, or the likelihood that borrowers will pay back their loans or not. Americans are known for having a great deal of consumer loan debt. With more debt comes the potential of not paying it back. As such, the lack of credit checks makes payday loans a fine lending option.
