It seems that nowadays there is hardly a day that goes by without payday loans featuring in the headlines. They seem to be the scapegoat of the UK’s financial woes, and while they are expensive they do have their place in today’s lending landscape.

In an emergency, when most people want to borrow a small amount of money banks and other lenders are often unwilling to help, and if people understand the costs up front what is the issue? Of course there are lots of people who get in debt because of payday loans, but it has to be said that surely these a lot of these people have acted irresponsibly by getting a loan in the first place? There are vast numbers of people that make exactly the same mistakes with credit cards and other loans.

Of course payday lenders should tighten up their lending criteria where possible to ensure the people applying can afford to pay the money back, but this is difficult if people lie about their circumstances.

The trouble is, is that if people don’t have the likes of payday loans to apply for they may be forced to turn to pawn shops or loan sharks. The majority of people who use payday lending services are responsible, and are happy to pay the extra cost involved because of their convenience.

Did you now that the overdraft charges of some of the UK’s leading banks are just as expensive as payday loans? It’s no wonder they heckle the payday sector, when it is denting their own earning potential! So what is the answer? If payday lending is so bad then the banks should lend money on a much more relaxed scoring system and at a cheaper rate. If the banks did this there would be less need for payday loans wouldn’t there?

The UK government has just announced plans to limit the amount of interest chargeable on payday loans, and while the banks etc may think that this is a victory for them, the government has helped the payday sector. Why you may ask? Because the government has just given payday loans a massive green light to the public who will expect to pay less interest, which in turn should make it seem a much less alarming short term credit solution. By the very nature that payday loans haven’t been banned, it has to show that even the UK government realises that payday loans really do have their place in the British financial landscape.