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