I know you’ve seen a sign for a quick payday loan or personal loan business. Almost every community has one or several of these types of businesses. The popularity of payday loan businesses has also boomed on the internet as well.

Normally I would be completely against this type of service, I have even written a previous blog about all the cons of a payday loan service; however with this blog post I have decided to take a different approach. I’m still not going to glorify or praise these types of businesses, but I want to bring up a few often overlooked points about the services.

First, a payday loan service is a legitimate business service. The owner is trying to run a successful business and make as much money as possible. My current employer is a reseller of technology to government agencies. They trust us to make good decisions about the technology we buy. In turn they pay incredible markups on computer equipment. They could buy the same equipment themselves; however they choose to pay 200% or more for the equipment to not deal with it. Should these type of businesses be frowned on as well?

Second, no one is forcing payday loan and personal loan clients to use the services. They have the option to walk into the stores or find the businesses online. If anyone wants to use these services it’s of their own free will.

Finally, payday loan services have to charge incredible high interest rates mainly because the clients that use the services have poor credit. The inflated rates are to cover the chance that some of the clients won’t actually pay back the loan.

Lending money is always a risk business for the lender as well as the borrower. I think these types of services should only be used in extreme cases of emergency. You you should research the lenders before using their services, especially if you are using an online lender.