Payday Loans are now an international business which is growing considerably every year. While they remain most popular in the UK and the US they are also common in Canada and Australia. In the USA payday lending is now a $7 billion a year industry and in the UK it is certainly worth over £100 million a year.
These figures are concerning for many who believe that lending at such high interest to those who often have the smallest income is immoral and irresponsible. However, the problem is that in this sup prime era payday lenders are often the only companies who will lend to people with Bad Credit. If people with emergency cash needs cannot go to official payday lenders then this may lead people to private loan sharks which many would argue is far more compromising.
The growth of the online payday loan market over the last few years has been unprecedented. However, this has also led to an increase in the number of Payday loan brokers some of whom charge fees for finding a lender who can lend to even the most ineligible of clients. There have been many complaints both in the US and the UK that both lenders but more often brokers carry hidden fees which borrowers were not aware of before accepting a loan or loan service. Many payday lenders and brokers have retorted that their terms and conditions are included on their websites like with any other loan company but many people fail to read them before accepting a loan.
There is mounting pressure on both sides of the Atlantic to make payday loans more transparent and to prevent people being stung by hidden fees. However, interest rates are likely to remain high because the lenders are taking a high risk by lending to people with bad credit.