The future for payday loans is unclear. Of course, payday loans have only recently become popular. Once it was generally more ‘acceptable’ to get a more traditional form of credit – whether it was through a bank loan or otherwise. The recent economic downturn, however, seems to have changed peoples’ minds.
Banks have been denying loans more than ever before, and with people struggling for cash, they’ve had to turn to payday loans for help. Payday loans have been the only way for people to get quick financial relief – suggesting that the rise in use of payday loans online has really only been because of external factors, and not because there has been a significant change in the service that’s provided.
So what can we say about the future for payday loans? Whilst nobody can really predict what will happen, we can predict what things could potentially happen as a result of external factors. If the economic downturn continues, then of course you can assume that payday loans will continue to be the great source of quick finance that many people turn to when they can’t get a loan. They will indeed also remain to be the source of finance that people use when a bank loan is simply too much of a large commitment to make.
But what about if the economy begins to recover? Two things could happen. It’s perfectly feasible to suggest that payday loans will become the sort of ‘outsider’ in the finance sector, and lose a significant amount of custom to small bank loans that would presumably become more accessible.
However, it’s considerably likely that quite the opposite will happen. The trust in the banks has been lost ever since the banking crisis, and many people have already turned their loyalties to payday loan firms. This could easily suggest that the popularity of payday loans can only increase, with people from all classes turning to these short-term credit agreements to ease financial pressure during the month.
Payday loans are not a traditional form of credit, and are not associated with banks by any means. There’s plenty of scope for people to turn to payday loan companies and other private financial firms, instead of conventional banks that are considered corrupt and untrustworthy. The fact that there are more payday loans than ever before also suggests that there is a growing market – and by continuing to provide high quality services then this market could easily be maintained.