Payday loans have received much negative attention in recent years. Is your opinion of short term loans based on facts? Read further to see how good payday loans can help you out.
How Good Payday Loans Can Help You Out – Bad Publicity
Thanks to a series of errors made by the payday loan industry, as well as a negative publicity campaign launched by members of parliament and the press, the public view of payday loans are overwhelmingly negative. But are payday loans always wrong?
Criticisms
One of the main criticisms of payday loans is their eye watering high annual rates of interest. Even good payday loans companies will still charge interest. Many payday lenders charge interest rates on an annual basis of more than 400%. This is far more than even the most expensive credit cards. But supporters of payday loans point to the fact that the loans are not meant for long term borrowing. They are just meant to bridge a temporary gap between a person’s income and expenditure.
According to many analysts, including economists, payday loans are a good thing. The very fact that the market for them exists suggests that companies in the sector must be doing something right. This must be so as they continue to attract customers.
How Good Payday Loans Can Help You Out – Useful Finance
When used correctly, payday loans perform an important function in the economy. They are a way for people on lower incomes to get access to credit and improve their financial situation. Whereas banks would usually refuse to lend to this market, payday loan companies help. They provide people with the ability to trade some of their future income for more money in the present.
Payday loans have been shown to help people in many ways when used responsibly and to provide a lifeline to people in need. Here is how a payday loan could potentially help you out.
How Can Good Payday Loans Help You?
A payday loan might be particularly useful after a death in the family. The average cost of a funeral, as per a report by the Daily Mail, has risen to £7,600, an 80% increase on 2004. According to estimates by the University of Bath’s Institute for Policy Research, more than 100,000 people in the UK will struggle to pay their funeral expenses this year. A big chunk of these expenditures goes towards memorial flowers and catering, costing more than £2,006 on average, as well as discretionary estate administration, with fees averaging an astonishing £2,160.
How Good Payday Loans Can Help You Out – Funerals
Funerals in the UK are becoming increasingly expensive. According to data from the University of Bath, the average funeral cost in the UK is now an eye watering £7,622. What’s more, it is rising every year. The government currently operates schemes to help families on low incomes pay for funerals. Still, recently, these schemes have been called into question. This is because they often do not cover the entire cost of funeral arrangements. Funeral shortfalls are typically in the region of £1,200. So, about the amount covered by a typical payday loan. Nobody wants to see their relatives buried without the dignity they deserve, and so payday loans can help you out in these situations too.
Conclusion
Currently families on low incomes rely on the social fund funeral payment, founded in 1988, but this only goes so far. A payday loan can help in circumstances where a family cannot meet funeral expenses out of their immediate income. However, they should be careful. Families should work to both reduce funeral costs as well as find credit to meet the shortfall.
