There has been a lot of comment about the short term loans industry in recent weeks with many social commentators and MPs critical of the high interest rates typical of these companies and the sometimes lack of transparency when it comes to rivalling the true cost of borrowing. Now, an online short term loans company has spoken up in defence of the industry as a whole.
Simple Payday Loans receives hundreds of applications for loans online every day and is well placed to understand the objections from the industry’s point of view. A recent statement outlines the criticisms that have been levelled against short term loans companies with the emphasis on the need for tighter rules on interest rate ceilings and stricter guidelines on how money can be borrowed.
Simple Payday says that there are few genuine licensed loans companies that simply give out loan to all and sundry. Payday lenders normally carry out a series of checks on the borrower and the criticism that anybody can apply for and get a loan is inaccurate.
They go on to say that, at the very minimum, a check is done is to make sure that the applicant for the loan is in full time employment and in addition a series of other creditworthiness checks may be carried out.
Of the hundreds of applications for loans received every day by Simple Payday, they reject nearly 98%. The industry standard for successful applications is only apparently 96%. This means that only 4% of applicants actually end up getting a loan and the reason that the rest are rejected is because they are deemed a bad risk of paying the loan-plus-interest back to the company. The figures tend to contradict the argument from detractors that the short term loans business is targeting the weak and vulnerable.
Spokesman from Simple Payday Loans, James Lewis, said that people who take out these short term loans often forget about the fact that they are supposed to be paid back in such a short time and get further into debt. “The fact remains that these people have to take some responsibility themselves,” he said.