Despite thousands, if not millions of people who benefitted from title loans, there are countless individuals and advocacy groups who are totally against fast cash title loan or any other type of easy and quick loans or cash advances. For them, these types of credit do not actually help people, instead; it merely exploits them because there are no banks or legitimate financial institutions that are willing to lend money to borrowers who are considered as mostly credit risk. But despite aggressive initiatives from these individuals and groups of people, it can never drive away companies offering such types of loans. Here are the top five reasons why:
First, should the government restrict or ban these kinds of loans, companies and other people will find another way to replace title loans, cash advance loans, and payday loans. The truth is; these kinds of loans can be construed as a legal evolution of loan sharks with a huge difference; loan sharks do not operate legally while title loan companies and similar online lending firms are registered and governed by laws.
Second, in economics, there is what it calls market forces. If these companies will be barred from providing loans to perceived credit risk individuals, it will tilt the balance when it comes to loans. Banks will charge higher interest rates as there are no rivals offering reasonable rates at an unbelievable speed of processing. In addition, when these people cannot pay their financial obligations, it will also impact the economy collectively as companies will be forced to treat their credit obligation as presumably bad debts and that will translate to huge losses when taken jointly.
Third, in the interest of the people, government will find ways to regulate systems of loan handling in these types of loan. State will see to it that its citizens will not be exploited and cause undue damage to the economy as well. When people pay more interest, the net money to spend for other goods become lesser, thus; reducing their purchasing power. When this situation occurs, some businesses will be forced to adjust their business due to reduced sales and income as a result of low purchasing power for buyers.
Fourth, there is no shortage of demand for credit. For as long as people will experience short term financial crisis and banks as well as other legitimate lending firms will not make adjustments to be flexible enough when it comes to offering short term credits at an amazing speed and ease of approval, people will always search for alternatives.
Fifth, this is the counter attack for loan sharks and makes them stay out of business. Anyone who believes that this type of loan is no different from loan sharking must be ill informed. There are huge differences in the way both operate: loan sharks use intimidation and humiliation to collect from borrowers while cash title loans and other similar loans do not do so, instead they rely on trust that borrowers will repay the loan.
There is really nothing to worry about when it comes to fast cash title loan and other related easy and quick credits as these will never go out of business.