Are Payday Loans Moral and Ethical?

Are payday loans moral and ethical?When asking whether payday loans are moral and ethical, you’re probably wondering how the CEOs of these companies can sleep at night. How can they have a clear concience when they’re living like fat cats by taking money from people that are in desperate financial need? This is a glaring case of the 1% taking advantage of the 99%, and can really get you upset if you start to think about it.

But just because they are providing loans to people with ridiculus rates and fees, does that make them immoral or unethical? After all, no one is putting a gun to anyone’s head and forcing them to take out a payday loan. People start the loan process out of their own volition, and it’s not up to a payday lender to play the role of a parent and guide these people in the actions they take.

Are Payday Loans Moral and Ethical? Not Really, But…

100% of the responsibility falls on the people that take out payday loans. If there wasn’t a demand, there wouldn’t be a supply, and if people didn’t accept these practices and boycotted payday loans, they wouldn’t last long. But they’re all in great financial shape, which means no matter how unethical or immoral they may be they’re still accepted by the masses, which places the blame on everyone.

Immoral to Charge Such High Fees
There’s no way around it, the fees charge by payday lenders are unnecessarily high. They don’t need to gouge people as much as they do. It’s all about increasing their bottom line and having the owners of these business make incredible fortunes. They could make a moderate profit by charging fees that were more in line with an ordinary loan. The should really be ashamed of themselves, because they are relying on other people’s misfortune, and taking advantage of them being between a rock and hard place. Showing compassion would be something alien to them.

Unethical to Say It’s a Savior
Many payday lenders try to make the case that they are saving you from financial disaster, or from other fees like overdraft charges and late fees. But in most cases they are not doing you any favors, and actually worsening your situation. The unethical part is not the actually loaning of the money, but trying to frame it as if it’s helping you in any way. Call a spade a spade. In most cases payday loans are the best out of a bunch of bad options to choose from. They aren’t helping you, but could be harming you less than some of the other options.

Unethical to Loan Large Amounts
Another unethical thing that payday lenders do is lend out more money than you can pay back without re-loaning the money to make it to your next payday. Payday lenders make most of their money from repeat customers, not from a large influx of new customers. They thrive on you getting into the habit of paying the money back and then taking it right out again. This allows them to make hundreds, even thousands of dollars, re-loaning the same $500 or $600 again and again. If they only lent out money that could be repaid on your next payday without the need to take it out again, it would be a much more ethical service.

Unethical to Require Full Payment
The other unethical thing that payday lenders do is require you to pay the full amount back all at once. Every other loan out there allows you to make payments on the loan, realizing that you won’t have the means to come up with a large amount at one time, or you wouldn’t have needed the loan in the first place. This is a part of how they get you to re-loan, and take on a fresh set of fees again and again. By allowing you to make payments they wouldn’t get you to re-loan as much, and wouldn’t make as much as they do.

So just know that by taking out a payday loan, you’re basically giving the seal of approval on their moral ethical indiscretions, and furthering their ability to do what they do to people that are already suffering.

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