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Traditionally, doings like that have been known as usury; in no culture, probably, are usurers praised as the good guys, salt of the earth and pillars of society. Are our quick loan offices just openers of hell’s gates and huge knots in nets of social ills; or are these merely services like any other in demand, a price asked and a client ready to pay? Both, it may be said, are represented in this biz.
For owners of the companies, quick loan business is surely profitable; still, the financial volumes aren’t as big and the reach as wide as one might conclude by hearing or reading the sad stories. Compared to sales revenue, profits of such loan firms are far from sci-fi. Probably, a good share of the money asked from debtors falls to those involved in debt collection. As any TV watcher will know, quick loan company ads are abundant – clearly, marketing costs to lure clients are high; naturally, media companies thus get their share.
As asked by postimees.ee, readers sent in their experience with quick loans. Some shared about one-off lending – till next payday – to get car fixed, or cover some other unexpected need. Calculated for a year, the interests are beastly indeed; even so, getting a couple of hundred euros for a short time, the client will not totally drown in payments. We might conclude, then, that occasionally quick loans are taken by people who will not promptly travel the valley of endless tears.
Others tell tales of deep need, but also of compulsive gambling, drunken parties, and total financial carelessness. These are the tales where a bank loan (with moderate interest?) is paid by a quick loan at alarming interest – to pay that, another fast loan is secured. These are the people who talk about letters by collectors, court cases etc while, for each letter or any other move, the firms ask for hefty money. In the end, the money will be required manifold. To refinance the debt at a reasonable interest is impossible, however, for no one will provide cheap loans to folks burdened like that.
As revealed by stories like these, in many instances fast loans are no innocent service, rather a glaring part of a social problem, serving to spread troubles known to man. To hang oneself (economically), people are kindly offered a rope glistening like gold. Even with several regulations applied, at stages, to the quick loans market, neither the state control, fines for offenders, nor information on the market are sufficient as yet.
Perhaps, those in dire straits should be better introduced to existing social aid options – like financial support and counselling. So that, when in trouble, people would run to social security network, escaping entrapment in quick loans net.