Why loans high interest rate

Payday can get cheaper but it’s a matter which needs lots of discussion. You can say so many things needs to be done in this regard. Former Deputy Director of the consumer financial protection bureau pointed to Maria Aspan about her recent column, he simply said yes, bank can do that but they won’t. While discussing her article “banks can develop a Better, Cheaper payday loan” Date shared his views at a conference held in Miami, while discussing about payday he was very confident on managing big data and complicated analytics and all such type of records. The question is it possible that bank work for their benefits of their poor customers. Can bank compromise for the benefits of their poor customers over the cash flow issues? If a bank takes such steps then who will need to borrow money against their next payday check. So the conclusion is bank has to do a lot of work to replace Online payday loans USA . Date points his conception as “the small-dollar credit problem” as one that can be largely solved by better data, which can then give lenders an incentive to lower their prices…

Lack of competitive dynamism.
 

He further said in this regard that “The credit costs are much higher than what they need to be. I think that through the application of more and different data sources, you can actually make fraud and credit decisions much better than has been possible in the past, and that, with the right competitive dynamic, can therefore start bringing pricing in,” he says.

Fixed rate of interest is required:
 

So it’s all about the stability of the rate of interests. The rate of interest should be fixed on a certain amount. It should not be verified from lender to lender. He criticize the act of banks who shows so much flexibility in this regard, he is of the view that Payday Loan USA has made the personal bank account so insecure and so is the financial position of a customer. He is of the view that a customer does not have any second option rather than to pay back the loan on time. However there are so many options if it is not the case of payday loan. The amount of loan can be adjusted, or it can be delayed for some other date. But in the case of payday loan the amount of Payday Loanon line USA is deducted directly from customer’s bank account. No matter if his consent is involved or not. Though this product payday loan he said is a low risk product, but banks can take initiative to introduce such products that have low interest rates. As you know everybody will never leave the option to get cash advance against low rates then automatically a competitive edge will be created that brings down the interest rates.

Actually banks are not interested in banking:
 

He strongly criticize the banks by saying that we live in the world where banks has no interest in banking and people when they are in need of money , has no option only payday loans. He pointed out there is no competitive market and the number of banks who offers short term loan on low interest might be one among hundreds. What is more interesting fact that banks are only interested to open the salary account of the people which have usual balance zero? So they are making their scope limited. While payday loan industry is getting flourish in this way.