Payday loans are also known as Cash Advance loans. Such loans are provided to those who are in desperate need of money and do not have any other source to get small amount from other than payday loan company. These loans are given for amounts between $100 - $1000. These amounts are very small and that is why the service has been started as no bank or other loan providing institution would consider giving such small amount of money as loans. Therefore those who require money at the time of sickness or for paying school fees are unable to get loans and fulfill their requirements.
Cash advance loans can be taken very easily and conveniently as the basic aim of these loans is to provide convenience to the public. Even though these loans are so convenient for the citizen then too they have become the most discussed subject since the time it has been introduced.
Since the introduction of these loans there have been various arguments regarding it. The union of employees in the U.S. has raised their voices since the introduction of these loans as according to them these loans instead of being of any help increase the problems of the employees and sometimes take them up to the situation of bankruptcy. According to them the lending fees charged for the payday loan is too high which makes it impossible for a low salaried person to pay the entire amount including the principal amount and the lending charges in one go and also make the necessary expenses of that month and therefore it forces the person to opt for that loan again and hence the cycle continues and there is no end to it.
They also had problem with the payment period of the loans. Since these loans are not given for a longer period of time it had become a problem for the employees according to the union. They fought in various courts to make them understand that a person with such low income will not be able to pay any such amount with one salary. If installment payment would be allowed them it would become easier for them to take out a certain amount of money from their income every month and make payment to the payday loan company. This way the borrower will also be saved from the roll over charges which are paid in case the borrower wishes to extend the time period of the loan.
The lenders tries their level best to convince the union by putting forward the advantages of these loans and by giving them answers to all their question but even then the union did not agree and kept on fighting against these loans. They wanted such loans to get banned or the lending fees to reduce and the repayment period to extend. Even after so many researches and facts and figures laid before the court in favor of payday loans there are certain cities where such loans were announced illegal and therefore no payday company can operate there.