Why Take a Payday Loan?

In the situations when financial help is needed badly not all people realize that there is such a good option as taking a short-term loan. Mostly, this happens due to the lack of information and general unawareness of a person. Here is some information to get a better idea of payday loans.

Who Takes Payday Loans

Despite the mass media facts about payday loans being predatory in nature, they are very popular and not without a reason. They are widely used by the U.S. citizens and in accordance with the Pew Charitable Trust research about 12 mln people use them. These are people aged 25-44, usually those who have to pay rent and earn less than $40,000 per annum.

In the state of Texas there is no surprise, actually, that payday loans are so popular – the thing is that they are much easier available here than in some other states. Texas is one of the states that are called permissive with regards to their payday loan policy. Neither the state caps the maximum loan amount nor does it limit the interest rate that lender chooses to charge.

Due to this fact there are plenty of lenders in the Lonestar State and they offer their services to everyone in need of fast cash. Surely, the lenders are very diverse and their terms and rates vary greatly as well. However, they provide real assistance to many customers in need of money.

Why People Apply for Payday Loans

The average statistics in Texas is that people apply for $300. Average term is 2 weeks. Initially, payday loans are meant as emergency help for various financial complications; however, at the present moment people use these loans for a much broader range of purposes like utility and medical bills as well as entertainment and for covering various everyday purposes.

Many people usually forget that payday loans are short-term and more expensive than regular loans that they take from banks. They also forget that they are meant to be a short-term solution and not as a pill for each and every financial trouble and means to cover every purchase and weekend out expenditures. This frequently becomes a reason that many people eventually get into huge debts and accuse payday lenders in being predators and scam. In reality, the major problem is that people overestimate their repayment abilities and frequently do not read the agreements they sign carefully.

The researchers also asked Americans what they would do if short term loans were not available. The great majority - 81 percent - said that they would cut their expenses on clothing and food. Other options also included borrowing from family or friends, selling property and delayed bill payments.

Some other statistic data shows that about 81% of people would have to cut their expenses on food and clothes as well as other everyday purchases provided that they had no option for getting a payday loan. Most people would also go to their friends and family for help.

However, not every person has got such an option as friends and family with money. The majority of households that apply regularly for payday loans simply have nowhere else to go. In this respect small dollar loans represent assistance for a really broad sector of population. All the more can be said for the people with bad credit who cannot rely on bank loans as well.


Taking all this into consideration, it can be concluded that payday loans are popular really nor without a reason. They are much more expensive than regular loan options and their terms are much more tricky to some extent; however, they do help a great deal of people and this is something you can rely on any time you need cash fast.


At FEDPAYDAY.com we represent a mediator company that does not offer payday loans or short-term unsecured loan products of any kind in the state of Texas directly. However, we have a very broad database of Texas-based payday lenders who we easily can match you up with. Taking into account your needs and requirements we provide assistance in finding you the most beneficial offer. All our partners are licensed and work in accordance with the Texas state laws.

© 2014. «FEDPAYDAY.com». All right reserved.