When a borrower takes a $400 payday loan, he still has to pay the huge interest rate that comes with it. This is despite the crackdown on rules that are prevailing in the payday loan industry in Australia. These rules are set to create some protection to borrowers who are in need of a payday loan. These rules could then also eliminate some deceptive moves of the lenders that would entice the borrower to file for more payday loans than they actually need.
However, the application of these rules may seem easier said than done as some of these rules have already been rejected by authorities.
These payday loans have been experiencing a rise in popularity and in need since more and more Australians are having financial problems every year. There seems to be no end regarding this matter and if this trend continues, more Australians will try to file for a payday loan in the years to come.
The thing about payday lenders is that they actually create more needs for borrowers to borrow again and again from them. Some of them have come up with other products that are set to raise the interest of cash loans higher than the usual.
To this day, there are a lot of Australians who are tied up with so many payday loans. Some of the rules that are set to be applied are meant to protect the borrowers so that they will not fall victim to other unnecessary loans that will be offered to them.
Make no mistake about it that payday loans are good for the short term only. However, if lenders succeed in enticing the borrower to borrow more, in effect it becomes a long term loan at a very high interest rate. Add that to the fact that the lender has direct access to the borrowers’ bank account.
With the rules being set up, there is no reason to believe that the industry will suffer because of it. The reason for this is that there are so many Australians who are in need of it and that they will always have this as their number one option to borrow money since there is no limitations that will stop them from filing. Even the rules that are going to be applied are not designed to stop them from filing. Nor are these to be put into place to make it difficult for them to avail of a payday. It will be there to protect them from spiraling out of control with regards to their borrowing.
Australians will always find the need to file for one and this is exactly what will keep the industry thriving and growing in the years to come.
So the thing is that payday loans are okay but it is important to limit yourself to how much you can realistically pay off with your next paycheck. If you can only pay for one payday loan, that should be your limit. Our company actually applies all of these rules to our borrowers. It is important to us that we offer only what the borrower needs because we are in this business to help them and not create more problems for them.