Have you ever been curious about the history of payday loans? It’s interesting to learn the payday loan industry continues to evolve over time. This type of loan started being utilized as early as the 19th century by what was then called ‘salary lenders’. A salary lender would then purchase your future income. The actual purchase price was four less than the amount of the salary. Since the 1930s and clear into the 90’s lenders have also cashed postdated checks for a minimal fee, thus providing financial institutions with the term check cashing. This phrase is still used today. Now there are many short-term loan companies that people rely upon defined of much-needed financial assistance during a time of need.
The Banking Deregulation
In the 80’s banking deregulation made it impossible for a smaller, local bank to even stay in business. When local banks eventually went out of business so did the option for short-term loans. Baker banks refused to offer this type of loan to people because they deemed them unprofitable. This is the exact reason why payday loan companies were opened to fill the void. These lenders devised a way to stay in business that also allowed them to offer people small loans precisely when they needed them.
Payday Lenders Today
Today you’ll find that payday lenders offer short-term loans and have moved their business to the Internet. This allows them to offer each borrower a more convenient borrowing process. You can easily apply for a loan online from the convenience of your home and have it deposited directly into your bank account. Such a streamlined process makes it easy for people to access the funds they need in case of a medical emergency, auto repair or just to help ends meet from paycheck to paycheck.
