A law professor from the University of Illinois has predicted that payday loans will in future be defined by their ability to offer cheap loans over the internet, and has stated that the industry must meet this with further checks so as to ensure that the consumer is fully protected.
How do Payday Loans Work?
Payday loans are simple: if you are in dire need of funds, for example to pay urgent bills, you can simply take out an immediate loan for a few hundred dollars to be paid back on your next payday. You are given the money minus any interest to be paid, and can then choose to pay this back when you get paid or else roll over to the next week and extend the period of repayment.
Pamela Foohey, who has researched subjects relating to financial law and bankruptcy, has stated that she too believed that online lending represents the future when it comes to short-term or payday loans and that, with the power of the internet, lenders can attract more borrowers than ever before. This of course will raise potential problems, and require scrutinization by the authorities.