• What Happened To All The Direct Payday Lenders?

    We’ve been reporting on online payday loan related news for years, probably since at least 2010! It seems that every year since then we’ve seen at least a few established direct payday lenders cease lending. Some companies that offer online loans just decide to move on to something else, but most often, these companies are shutting down because of increased regulation. As you’ve probably noticed there aren’t nearly as many direct payday lenders listed in our database as their used to be. new-payday-loans Trust us, it’s not because we’re lazy and we don’t want to update our site with new online lenders! Payday lenders have been dropping off our database for two reasons. First of all, many of the longtime large direct payday lenders have decided to cease lending for the time being. Secondly, many states have made it much harder to apply for and receive a payday loan in their respective states. For example, Louisiana and Ohio have laws pending that may result in even more direct lenders leaving the industry. The payday loan industry has been dealing with these issues for the past few years and we’re just now seeing the benefits of a more streamlined industry. With a more regulated industry we don’t have to deal with the offshore direct lenders who had little to no regard for laws that are in place to protect consumers. With that being said, it finally looks like we’re going to start seeing some of the longtime direct payday lenders come back on board as we move into early 2016.

    Where are all the direct lender payday loans?

    Many of the payday loan direct lenders decided to stop lending because the federal government has been cracking down on the industry as a whole. Most of these companies have either paused their lending or decided to go into the less regulated installment loan industry. Even though these lenders serve a need by offering short term loans, it’s probably safe to say there are no tears being shed for the industry as a whole. For all too long many fly by night companies and unscrupulous lenders decided to charge insanely high interest rates and tack on costly fees as well. We’ve seen some offshore payday loan lenders charging interest rates that were in the thousands while continuing to rollover loans. Obviously, companies like these need to go. With increased regulation and oversight by the government it may be safe to say that many of those rogue direct payday lenders are no longer around and if they’re still around their time is almost up. That’s great news for the consumer who really needs payday loans direct lenders, but it’s gotten to the point where that consumer can’t even find a reputable direct lender to work with! Ever since the government crackdown on the payday loan industry many reputable direct payday loan lenders have been caught in the net of increased regulation. It’s gotten to the point over the past year or so that these direct payday lenders have simply decided to move on to another industry or wait out this round of government oversight.

    payday loans direct lenders
    The other issue that’s caused large direct lenders to disappear is that fact that most states have strong-armed them into no longer offering loans in their respective state. For example New York and Pennsylvania have completely banned direct payday lenders from offering loans in their states. This may look good on paper, but what are consumers supposed to do when they need a short term loan and no one is there to help them? We see the results of this issue now in the states that have banned payday loans. We’re now seeing offshore lenders and local loan sharks coming onto the scene and rest assured those “lenders” aren’t going to do things by the book like the normal payday loan direct lenders would. Remember the stories you used to hear about local loan sharks getting physical with someone over a small loan? We definitely don’t want to go back to those days, but people get desperate when there are no other short term lending options. Some other states have settled on a different solution that seems to be working much better. California for example has laws in place that limit how much a direct payday loan company can offer a consumer but they haven’t done anything drastic like totally banning payday loans direct lenders. This enables the California resident to get the short term loan they desperately need while also having some government regulation in place as well to protect them from unsavory online lenders.

    Payday Loans Direct Lenders Aren’t Going Away!

    As we mentioned above it looks like some of the longtime reputable direct payday lenders are thinking of coming back on board as we move into 2016. Many companies are now offering different types of loans such as installment loans and direct cash advance loans. Some payday loan lenders won’t be able to offer loans in all they states they used to. They also may not be able to lend as much money as they could a few years ago. Regardless, they’ll be back in place to serve a need that will always be around. History says there will always be consumers with bad credit who don’t qualify for traditional bank loans. Hopefully the payday loan industry is in a better position now then where it was a few years ago. In a perfect world the legitimate direct payday lenders can still make money and help consumers as well. Let’s see if we can get to a place where payday loan direct lenders and consumers with a legitimate financial need can co-exist without burdensome government regulation!