| Payday loan companies are thought of as the | | | | |
| bottom feeders of the banking industry. Many | | | | A bank will give away a free checking |
| people believe that these companies just take | | | | account, because they know there is a good |
| advantage of low income families and hurt | | | | chance someone will slip up and bounce a |
| them more than they help them. The rates of | | | | check. Then the bank will get to charge |
| payday loan companies seem high, because they | | | | almost $30 for an overdraft fee. A payday |
| are giving a very short term loan, which is | | | | loan will allow someone to get a small loan, |
| small and usually not very risky for the | | | | from $150 - $500 usually, to help pay for an |
| company. | | | | emergency expense. This really cuts down on |
| | | | the amount of overdraft fees that a bank will |
| However, if you were to seek out a loan from | | | | be able to collect on their customers. |
| a payday company in your local area, you will | | | | |
| see that they have to make enough money to | | | | Banks also hate payday loan companies so |
| pay their own bills. These companies have to | | | | much, because banks can not get as many |
| pay their employees, rent or mortgage, and | | | | people to sign up for long term loans. Many |
| other fees to conduct business. All of these | | | | times a person just needs a small loan to get |
| things add up, so they have to make enough | | | | them through a tough time, but they get |
| money to stay in business. Also if you were | | | | suckered into a larger loan from a bank. |
| to compare a payday loan company's rate to a | | | | Banks usually will not give a loan less than |
| credit card, you would see that they are | | | | $1000; so many times people will have to get |
| similar and in some cases lower. The payday | | | | a larger loan than they would have if a |
| loan industry also has a hard time, because | | | | smaller amount would have been available. |
| the banking industry hates them. | | | | |
| | | | Banks also usually require some type of |
| Banks hate the payday loan companies so much, | | | | collateral, like a house or a car, to receive |
| because these companies are taking money out | | | | a loan. However payday loan companies will |
| of the banks' pockets. Banks only care about | | | | give these small loans as long as you have a |
| their bottom line. They do not care about | | | | bank account, steady employment, and they |
| the people that they service. In fact banks | | | | will only loan you 25% of the total amount of |
| will sometimes allow people to get themselves | | | | your paycheck, so it is harder to get in big |
| in too deep, because they know they can get | | | | debt with a payday loan company. |
| more money out of them. | | | | |