Consumer vs Payday Loans – Why Massachusettsans Vote In Favor of Payday Lending Options?

Consumer vs Payday Loans - Why Massachusettsans Vote In Favor of Payday Lending Options

With the onset of the age of technology, payday lending options have confidently taken a leading position in the financial market in the United States and Massachusetts, in general and respectively. Profile lending services are popular among the residents of the USA. In such a way, they have already formed a solid competition with banks.

Why do Massachusettsans choose payday loans more often?

The results of a financial survey among 10,000 respondents (residents aged 18 to 60) are unpromising for banks. To the question of where it is profitable to take out a loan, citizens answered as follows:

  • 75.2% – vote for payday loans and online lending;
  • 14.1% – prefer banks;
  • 5.8% – prefer not to answer;
  • 4.9% – are categorically against cooperation with financial companies.

Such success of non-bank credit organizations is due to difficulties in issuing a bank loan, as well as restrictions on the minimum amount. Basically, people do not have enough finances to paycheck, and they need small funds: $100-$1,000. Banks also issue loans in the greater amounts.

How to get a bank loan: the complexity of application

First, you need to collect a package of documents (ID, TIN and additional confirmation of official income), and then visit the bank’s office with it. Here you will have a queue to see a specialist and a lengthy application procedure. Usually filling out the questionnaire takes 30 minutes or more.

The decision does not always come automatically and sometimes you have to wait from 1 to 3 days. After that, the client is issued a card and funds are credited to it within 1 business day.

Note: the rate of refusals in banks is very high. After all, cash loans belong to the high-risk group. Therefore, the security service conducts a comprehensive identity check. If the bank’s employees have even the slightest doubts about the client’s solvency, the loan will be refused.

Payday loans in details

Payday loans have several differences from bank loans:

  • the minimum package of documents: ID and TIN;
  • online application – no queues, waiting in the office and loss of time;
  • the decision to issue a loan is made quickly (from a few minutes to a day) – it all depends on the amount and credit history of the client;
  • cash is issued in person at the company’s office or transferred to your card – at the discretion of the person issuing the loan;
  • restrictions on the amount are minimal – from $100;
  • lack of details – you can not report on the lending purpose;
  • an abundance of promotions and offers – companies are constantly developing loyalty systems, introducing discounts and incentives;
  • transparent interest accrual – the amount that will have to be paid is announced immediately;
  • a short loan term is usually 1-2 months.

When taking out online payday loans, the client pays only a rate for the use of cash – nothing more. There are no all kinds of insurance, commissions and service fees.

Statistic data – why Americans prefer payday loans online?

The rapid development and success of financial companies issuing small loans are also confirmed by official figures:

  • positive decisions on short-term online loans are issued in 93-95% of requests;
  • the annual growth of the payday loan market was about 360% over the past year;
  • financial companies specializing in payday loans paid 8% more taxes than banks.

The payday lending market is actively developing. Today, such organizations create a serious competition for banks and pawnshops. Perhaps this is the first step towards a large-scale reboot of the financial system. Now banks are forced to revise the terms and become more loyal to customers.

What are the types of online lending?

There are the following ways to get loans quickly. They differ in the options for getting extra cash.

A payday loan can be issued to:

  • to your e-wallet;
  • to a bank account or card;
  • provide a loan in one of the online stores.

Each of the listed options has its own nuances and features.

Advantages of online payday loans

Payday loans have great advantages compared to the issuance of loans or the same small loans in the offices of official banks:

  • benefit. When you issue your first loan, you are given a favorable bonus;
  • speed. To take out a loan online, it will take a maximum of 10 minutes, and to receive funds takes – no more than several hours. This speed is due to the constantly working technical support, which works around the clock and promptly processes applications;
  • safety. When taking out a payday loan, the customer provides a minimum amount of personal data for processing. All that can be required from the user is a ID and an e-wallet or credit/debit card number. While in the banks, they can ask for a certificate confirming official employment, income, be interested in the purposes of issuing a loan, check the credit history;
  • convenience. Everything you need to apply for a loan online: a device that supports modern browsers and good Internet connection.