There was a very popular song in the 1970’s which had chorus which went “Money money money, it’s a rich man’s world!” When ABBA recorded this song, it is unlikely that even they could comprehend how significant these words would be even to this day. Today, people can understand that it is money which makes the world go round. The entire society places an enormous amount of importance on the financial condition of people.
Backdrop
People need to work extremely hard today in order to make ends meet and go about their daily activities. But there may come a time in every person’s life when he faces some kind of financial difficulties. These financial troubles, as is the case with any kind of trouble, come at a time when people least expect them and are completely unprepared to face them. For most people, these problems can be devastating.
Recovering from these difficulties can prove to extremely difficult. But, where there is a will, there is a way. The banking structure today is such that people can quite easily get all kinds of loans. There are schemes which can provide loans and monetary assistance to people in all kinds of predicaments. Some of these loans are provided by banks while some can be borrowed from private lenders. One such kind of loan is the payday loan.
Structure of the loan
This loan is mostly provided by private lenders and has become quite popular nowadays. It is also referred to as a payday advance. The structure of this kind of loan is short term and unsecured. This means that the borrower in most cases does not need to mortgage any property in order to secure the loan. The nature of these kinds of loans dictates that the borrower must repay the borrowed amount on his next payday.
This means that the borrower must repay the loan when he gets his remunerations from his place of employment. Hence, the effective duration of the loan often amounts to a few weeks. Due to the extremely short nature of these loans, there can be some instances where the lender demands extremely high and uneven interest rates. It is for this reason that there are some jurisdictions which can impose a limit on the annual rate of interest for the lenders. This kind of loan can be extremely helpful to people for a lot of different reasons.
Reasons behind taking the loan and demographic of borrowers
The most common reason behind people availing these kinds of loans is when people run out of money before any particular months end and they do not have enough money to carry out their day to day activities. It has been observed that the people who avail payday loans mostly do so in order to cover some of their common and daily expenditures and in some rare cases in order to deal with some kind of emergency.
This type of loan is very common among Caucasian females within the age group of twenty five to forty four. Despite some criticism, this loan remains extremely popular.
