Doomsday Predictions for the Payday Loan Industry Turned on Their Head

Various news outlets reported that the payday loan industry may be breathing its last few breaths shortly before new regulations for the industry went into effect. They made such bold predictions as that there would be greatly increased prices, illegal lenders, and decreased eligibility for consumers. Many of these prognostications are quickly being disproved as the payday loan industry continues to thrive.

The Telegraph proclaimed that new regulations would see many payday loan companies go under, which would lead to decreased competition and ultimately higher costs for consumers. While this was partly true, it has mostly turned into a positive instead of the doomsday prediction it was made to be.

Many payday loan companies did fold once the new regulations were put into effect. But most of those were companies that were operating irresponsibly and lending at exorbitant prices. Their departure from the industry is not missed, and it has paved the way for the remaining lending companies to fill in the voids. But those companies have not done so by raising their prices- quite the opposite, in fact.

Instead, prices have decreased as increased visibility for some of the less than reputable practices of the payday loan industry has made it necessary for the honest companies to offer incentives to draw in new and previous customers. They have slashed their prices and made it easier for consumers to pay back their loans in an effort to put a good public face on their industry. This has paid off well, as consumers are now more positive about the industry than ever before.

Consumer agencies note that complaints about the payday loan industry have fallen by about half. Consumers see the payday loan companies that remain in a very positive light, and this has made for a healthier, vivacious industry.

Illegal lenders are also on the decline, as it is obvious that those payday loan companies engaging in illegal and toxic practices are being chased from the market. Tighter regulation has actually caused greater openness and honesty in the payday loan business, and it is most evident by the sheer number of companies leaving the industry behind. They cannot remain in the market because of the way their businesses have to be run, but the honest payday loan companies are still holding strong and many are doing better than ever in the wake of decreased competition.

This does offer reduced consumer choice, but it is obvious that the choices that remain are better for the consumers than the wide variety of crooks and thugs who once tarnished the industry.

Now Is the Best Time to Make Use of Payday Loans

Payday loans offer a way solve short-term financial problems. They have always been a great way to help people who had few or no other options. When banks turn customers down because of poor credit or a lack of a credit history, payday loan companies often accept the same people for their loans.

While the industry has had its fair share of criticism, it continues to get better and provide a better environment for consumers. Recent regulations in the industry have actually led to a healthier set of payday loan options for consumers, making this the best time for people to use payday loans.

Restrictions and regulations in the industry have ensured that payday loan companies are honest in their advertising and their practices. They have to be upfront about the costs and risks of using their services, and as such, they are engendering better customer relations.

Changes to the industry in the wake of new regulations have actually made for much tighter competition. The companies that compete against one another for the same customers have to find new and innovative ways to advertise and to appeal to their consumer base. This has forced many of them to drop their prices to incredible lows not seen in a long time.

This new payday loan marketplace is one that is geared toward the advantage of the customers. The way payday loan companies treat their customers and the kinds of services and rates they provide has changed dramatically in just the last two years. Those who have never considered using such loans are now finding it safer and more beneficial to use the loans as a short-term solution to their financial difficulties.

The wave of regulation was seen as a negative by some within the industry, but it has made for a healthier environment, and it is changing the way that business is done. Many people who might never have considered using a payday loan are now looking at this service in a new light. They see fairer rates and practices and they understand that they are being offered a valuable product that can help them out of a tight spot.

While many payday loan companies have been forced to adapt, the change has worked both good and bad for the industry. How it will affect companies moving forward is hard to say, but for now, it is obvious that customers are benefitting greatly from the new regulations.