Did the demise of the weekly wage packet, fuel the rise of paydayloans?

Payday Loans Play a Part in Many People’s Livesinstantlolly.co.uk /world/2014/02/part-payday-loans-play-many-peoples-lives/

How the advent of payday loans has solved a problem with its roots back in the 18th century.

Ever since the Industrial Revolution brought prosperity to the UK with widespread employment and ageneral rise in living standards, most workers had the legal right to be paid in cash on a weekly basis.

That system worked well for over a hundred years but was eventually replaced when the “Truck Act”which supported it was finally repealed in 1983. The main argument had been that it was not safe to betransporting millions of pounds around the country in vans and that there were realistic and much saferalternatives available. From that point, employers were no longer obliged to pay their employees incash, or on a weekly basis. The incidence of raids on payroll departments reduced and the criminalswho used to target the security companies who transported the cash from the bank to the place ofemployment, turned their attention elsewhere.

Although many continued to pay in cash and a few still do, most employers gradually moved to a cash-free system with money being paid either by electronic transfer into the employee’s bank account or bycheque which, although now largely disappeared, also required a bank account in order for therecipient to be able to cash it.

The bottom line was, and still is, you need abank account in order to have a job these days- a fact that the banks are, of course, verypleased about as it presents them withunlimited opportunities to make money from itscustomers.

That is, many would say, just progress and isunavoidable and, whilst this is true to a largeextent, it does cause some problems for manypeople. The disappearance of the little brownenvelope full of cash handed to the employeethrough a little window in the wages office wallis, to be honest, no great loss but the generaldrift from weekly pay over to monthly pay has had a more significant effect on many people.

Monthly budgets and life’s emergencies simply don’t mix

A month is quite a long time to go between paydays as many of us can testify. A lot can happen in amonth, much of it unexpected and sometimes the next injection of funds into our bank account justcan’t come quickly enough.

No matter how meticulously you plan your finances and purchases, no matter how carefully you budgetfor the things you need, every now and then one of life’s little emergencies will happen that you justcould not foresee or budget for.

There are many examples of this; the car that unexpectedly breaks down and needs an expensiverepair, the washing machine that gives up the ghost just when you have a pile of washing to do, thekids need cash for a school trip – the list is long and we could all add to it with examples of unexpectedexpenses that we ourselves have had to make arrangements for.

If the car breakdown takes place on the day that you get paid, or just after, it can probably be dealt with

Payday loans are designed to bridge the gap between paydays

but, let’s face it, that doesn’t usually happen that way. Instead, the unexpected cost usually comes at atime when you’ve either spent, or committed to spending, all of your available cash and you simplydon’t have enough to get you through to the next payday.

So what solutions are available?

For some, this can be overcome by arranging an overdraft facility with their bank but this can beexpensive and the banks are often reluctant to provide overdrafts to all but the few who probably don’tneed them anyway.

Others may have a credit card that they keep in reserve, “for emergencies” and that is a commonenough solution but, for many, what starts off as a short term fix for a short term requirement, oftenends up being a longer, sometimes much longer, commitment as the ability to repay a minimumamount each month just keeps the debt running and running.

Those who have an asset, such as a property or shares, can usually borrow against that asset and geta reasonably priced loan as required but, again, these tend to become longer term commitments tosolve a short term problem. Others may use a less valuable asset such as a camera or other tangibleitem, to arrange a loan from a pawnbroker – a service that has seen a resurgence in popularity inrecent years since it combines convenience with relatively low borrowing costs due to the lenderholding an asset as security.

So called “log book loans” are also available, if you own a car outright. These loans enable the carowner to sign over the ownership of the vehicle to the lender until the debt is repaid after whichownership reverts to the borrower. Again, fine if you own the car but, for many of us, we never do – it isjust another thing we budget for every month and pay over a number of years.

Payday loans are just the tool for the job

Whilst some of the above are OK for some of us, some of the time, none of them are really geared up tothe situations we sometimes find ourselves in where we just need a relatively small amount for what isoften just a few days. Enter the solution to just that particular problem – enter the payday loan.

Payday loans are simply short term loans, so-called because they can bridge the gapbetween the need for cash occurring andpayday arriving. They are widely available andcan often be arranged completely onlinewithout the need to visit an office or leave yourhome at all. Payday loans can usually bearranged very quickly, hence they’re oftendescribed as same day loans, with fundssitting in your bank within a few hours – allfrom your favourite armchair, thanks to theInternet and the payday loans companyinvesting in online processing technology tomake such a service possible. In fact, in manycases, existing customers can requestadditional loans via text message from a mobile phone.

More recently, payday loans have become known as “bad credit loans” – loans for people with a poorcredit history. Whilst it’s true that payday lenders take a more pragmatic approach to lending decisionsthan their banking counterparts, it should be noted that payday loans are in fact suitable for all creditcircumstances.

The real benefit of payday loans however is in the straightforward approach to the way in which theyare sold. It pays to shop around and to visit a few websites – you’ll come across direct lenderswith their own products and loan brokers who offer cash loans from a number of lenders. What you willnearly always find, however, is an easy to understand explanation of just how much it will cost you toborrow the amount you need. Many websites have an online calculator that lets you experiment withdifferent amounts and repayment periods, although these are rarely longer than one month.

When you have found a payday loans provider that meets your needs, the application process isusually completely online and you get a decision within a few minutes.

In most cases you don’t have to remember to repay the loan because the payday loans company willtake their payment automatically when you get paid.

So there it is, problem solved and you can get on with your life – or the washing – thanks to theavailability of safe and convenient payday loans.

At Instant Lolly we believe in being sensible with money – but if you find yourself in a fix, we can helpout. We provide payday loans up to £1000 with instant approval. For more details and to apply, checkus out.