More than 1.2 million people needed payday loan help this year. Who does it attract and for what purpose? Quick Loans Express, an easy UK fast loans lender uses a research and case study to determine the reason for the interesting shift in payday loan users.
Middle-class shift to payday loan help
In the past, payday loans were not available online and clients were likely to make their way to small corner shops, standing in long queues lined with working-class people who typically did not have university degrees. Payday loan companies provided relief for those who had unskilled jobs, such as cleaners. The middle class, however, avoided them as they managed to live on their high-salaried jobs. They enjoyed the relatively easy way of living, raking it in with the economy that was booming. There was a direct split between those who could afford and those that could not. The assumed societal classes were maintained so that they were divided into the rich, the middle class and those that live almost in poverty.
This is changing. The society is changing and classes are no longer bound by the old rules. Many middle-class people are struggling to stay afloat on their salaries they always had managed on. They are paying the price of falling wages, rises in cost of living and the shaky job market threatening to expel those hard-workers that had stability until now. The middle-class boundary is becoming fuzzy with those stricken with poverty. Money has become tight.
Take Joseph William for example. He was the conventional middle-class journalist. He had a degree and a good job and he was making his way to the top rung of his career. In his own words, ‘I was doing everything right!’ Borrowing money had no place in his comfortable life. Payday loan help, in his mind, was reserved for, the uneducated members of society. It did not take long before he would discover the true clients of the payday loan companies.
After a bitter divorce, the media gossiped about the break-up. Not only causing him emotional turmoil, his company sacked him. After finding a simple job, yet houseless, he needed extra cash just to manage day to day living. But how? Where payday loans once seemed untouchable, he turned to them. He discovered the world of payday loans, the benefits, the dangers and most surprisingly, the type of people who use this service.
Payday Loan Companies
Payday loan help is no longer only tailored for the working-class, Joseph’s middle-class counterparts frequented the websites and stores offering these services. In fact, a study by the Chicago Federal Reserve (2015) found that the number of people with college degrees using payday loans has doubled since 2007. Clearly, there is a reason for this. Payday loan companies have noticed the change too and offer competitive interest rates and services.
Payday Loan Assistance
Moreover, not only alternative financial companies were promoting this idea of unsecured quick loans. The banks are on board too. The understanding is that people are not looking to borrow big money. They just need a shoulder to lean on to get through the month. The banks and payday loan companies, therefore provide for those seeking quick and short-term loans. Payday loan help does not require any guarantor and so are quick and easy to arrange online if you have an income. Those in need, choose this option.
For people like Joseph, payday loans helped him get back to his feet. He needed an extra cash boost to find new opportunities to revive his career. Payday loans gave him the ability to find a new job, provide a roof over his head and spend money on his children.
Payday Loans: Help or Hindrance?
The question is how? How does borrowing pay day loans increase your chances of becoming financially stable? The answer lies in the change of people using these services. The OFT found that young, single, employed, men earning more than £1000 in rented accommodation use payday loans the most. The higher earners are the most likely to use payday loans. It is not the low earners that are the typical borrower. People use payday loans as a temporary and backup solution. Presumably, they need the extra cash as a one off and quickly, for instance: to use on holiday; or if they are changing jobs or an event. They use fast payday loans and can pay it back in total promptly.
Are Payday Loans Bad?
However, with loans comes responsibility. Payday loans are no different. When considering borrowing money, you need to consider all the options, with all their strings attached. You need to ask yourself for how long do I need this loan? How much do I need? What are the consequences of borrowing money? Most importantly, am I able to pay it back?
Remember, loans effectively need repayment. Payday loans include repayment with interest. Consequently, the longer you take to repay, the higher the interest will be. Additionally, loans cannot be used as a long-term solution. Payday loans are intended for short-term use only, for times when you need a quick cash boost and you know you will be able to repay it at a later date. Taking out loans need to be carefully planned and used sensibly. If you find you need to turn to them constantly, consider contacting advice services such as the Citizen Bureau and Money Advice Services who give impartial advice on money management. Additionally, it is important to work out other ways of earning or saving money to cover one-time financial struggles. Do not let money consume your life.
Summary of who Needs Payday Help
Quick Loans Express looked at how society is changing so that more high-earners are using short term instant payday loans help then there were previously. The shift occurred because of lowering wages, higher cost of living and middle-class earners decreasing in size. We looked at the customers’ choices and how the banks and payday loan lenders have adapted to their needs. Furthermore, it is important to consider the dangers attached to loans so that you use them sensibly and temporarily.