What Happened To All The Direct Payday Lenders?
We’ve been reporting on online payday loan related news for at least a decade now! It seems that every year since then we’ve seen at least a few established direct payday lenders stop lending. Some companies that offer online loans decide to move on to something else. But most often, these companies are shutting down because of increased regulation. As you’ve noticed there aren’t as many actual lenders listed in our database as there used to be. Trust us, it’s not because we don’t want to update our site with new online lenders! Payday lenders have been dropping off our database for two reasons. Some large direct payday lenders have decided to stop lending for the time being. Most states have made it much harder to apply for and receive a payday advance in their respective states. For example, Louisiana and Ohio have laws pending that may result in even more direct lenders leaving the financing business. The cash advance industry has been dealing with these issues for the past few years. We’re now seeing the benefits of a more streamlined industry and that includes car title loan operations as well. With a more regulated industry there’s less to worry about with unlicensed operations. We don’t have to deal with the offshore installment loan companies. Many of these firms had little to no regard for laws that are in place to protect consumers. With that, it looks like we’re going to start seeing some movement. Some companies may back on board with new offers we move towards the end of 2020.
Where are all the payday loan companies?
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 safe to say there are no tears being shed for the industry as a whole. Many fly by night companies and unscrupulous services decided to charge high interest rates. Some will tack on expensive finance charges and monthly fees as well. We’ve seen some offshore payday loan lenders charging interest rates that were in the thousands. All the while these companies continue to rollover online loans. Rogue offshore companies like these need to go. With increased regulation and oversight by the government it may be safe to say we’ve reach that point. Many rogue lenders are no longer around. If they’re still around their time is almost up. That’s great news for a consumer who needs fast or emergency cash. But it’s gotten to the point where that consumer can’t even find a reputable direct lender online to work with! We’ve seen a government crackdown on cash advance companies and installment lenders. Many have been caught in the net of increased regulation. It’s gotten to the point that these loan services have decided to move on. Some have gone to another industry and others will wait out this round of government oversight.
There are other issues which have caused large direct lenders to disappear. Most states have strong-armed them into no longer offering same day loans in their respective state. For example New York and Pennsylvania have banned high interest loans. 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 online financing. We’re now seeing offshore companies and local loan sharks coming onto the scene. Rest assured those “lenders” aren’t going to do things by the book like traditional companies would. Remember the stories you used to hear about local loan sharks getting physical with someone over a small loan? We 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 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 banning short term online financing services. This enables the California resident to get the short term loan they need. We also get government regulation in place as well to protect them from unsavory online lenders.
Loan Offers For People With Bad Credit Aren’t Going Away!
As mentioned above, it seems that some longtime reputable direct payday lenders will come back in a few years. Many companies are now offering different types of loans such as installment loans and cash advance loans. Spend some time and compare many of the largest direct payday loan services. Some companies won’t be able to offer loans in all states. 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 online payday loan industry is in a better position now compared to a few years ago. In a perfect world the legitimate companies can still make money and help consumers as well. Let’s see if we can get to a place where reputable loan services and consumers can co-exist without burdensome government regulation!