The first problem facing stores and websites like http://www.payday-loansuk.org.uk that offer payday loans is that customers just can't afford the interest rates in our current economic climate. If circumstances change or the borrower is irresponsible and cannot pay the loan back by the appointed time, he or she can face massive charges in interest. A person taking a payday loan of about $4,000 and winding up paying more than $5,000 in interest isn't entirely unheard of. Changes in your financial circumstances are a reasonable excuse, but much of this behavior comes from lack of responsibility. Many people take out payday loans knowing that they don't make enough money to pay it back at the appointed time, and they are also fully away of the high interest associated with these loans, and because of this, we may pay the price.
Proposed legislation in Alabama has stores closing their doors for good. Lawmakers are hoping to cap the limit on interest regarding payday loans to an annual 36%. Its proponents claim that by capping the interest, such short-term loans won't become lifetime commitments, and the people who take out such loans will be able to see the light of day.
Payday loans for desperate situations
We must also not forget the USPS and the way it's been floundering since the invention of email, Facebook, and other electronic ways to communicate. In an effort to save the postal service from extinction, there are further government proposals designed to replace the stores that offer payday loans by allowing the post office to handle basic banking.
But does this spell the end of payday loans? There's good reason to doubt it. For one, payday loans are popular worldwide, and while this might curb some Americans from getting such loans, the rest of the world will be happily signing contracts. Also, the best places to get payday loans, or anything really, is the Internet nowadays. A quick Google search will bring in thousands of results, so if you can't get a short-term loan near you or your bank doesn't offer one, the Internet is right there to help you.
Ultimately, I think these trends and laws will affect physical stores, but such services will continue to flourish online. Payday loans are under attack, but the chances of losing them in a net of government bureaucracy is slim. Only the people will decide what the future of such loans will be, and where there is demand, there is supply.