Consumers have needed subprime loan credit which includes pay day loans for a long period

Loan credit classified as “Subprime” will constantly be around. The mortgage crisis over the last few years brought the term “subprime” to the national lexicon, and it applies to borrowing money from a loan lender without the credit scores that a top notch, or prime, lender would lend to. Bad credit loans come in many forms, for instance a payday loan, a home loan or a vehicle loan.

Loan credit didn’t always depend on scores

Credit, especially loan credit, was not invented by us. It existed long before our financial system. There had been a time where getting credit was not hard. The promise of a future payday was all that had been needed. Following the San Francisco fire and 1906 earthquake, Bank of The United States, or the organization back then, became popular by offering loans which were quick and easy and just required a promise to repay. Credit cards didn’t exist until the latter half of the 20th century, but people still once in a while needed a pay day loan.

The large loan sharks

Pay day loans are accessible to those with bank accounts and a stable income whenever they need one. As long as a person is responsible when he or she borrows cash from cash advance providers, there is no danger. However, prior to the early 20th century, it had been a different story. Back then, if individuals needed money, they had to go to an underground lender, or “salary buyer.”. Essentially, an individual would borrow a portion of his next paycheck, which had to be turned over to the salary buyer. However, salary buyers could charge whichever they wanted and extract payment any way they wanted.

Take into account demand and supply too

As result of public outrage at underground loan companies like “salary buyers,” states passed small loan laws, which elevated usury rates. That meant that it was legal and safe for people to borrow from then on. Real loan sharks will end up in business if pay day loans are banned. The Payday cash advance loan Facts and Statistics report on Personal Money Store is another place to go.