Payday Loans and Storefront Lenders? Time for Debt Relief

Times may be a changing for the so-called, storefront loan shops, the latest industry to take a hit from the subprime lending fiasco; can that be a bad thing when so many are already seeking debt relief?

The trademark loans known for their high interest rates and quick approval for people in a not-so-favorable risk category are falling into some hard times, according to a recent article in the Wall Street Journal, “Choices Shrink for Subprime Set.”

Finding cheap money to lend for the likes of  Springleaf Financial, once a part of American International Group (AIG) is becoming harder to do:

Already, the shutdown of the subprime-mortgage market has forced multiple companies to close hundreds of storefront –lending locations and cut loan origination by hundreds of billions of dollars…And without new mortgages, the consumer-loan volumes alone make it difficult for companies such as Springleaf to keep so many stores open.

But someone is always waiting in the wings to fill a need when the opportunity arises. Discover Financial and Capital One Corp. , and others, look to “building out direct-lending businesses that don’t require physical branches.”  Too, Payday lenders who tend to attract the cash-strapped set are gaining a more prominent foothold.

“There remains a large, addressable market for these products and services, and it hasn’t gone away,” notes Mark Wasden, a Moody’s Investor Service analysis.

Our debt monsters will forever come to us in the middle of the night, from maxed out credit cards to the no-money-left-until-the-next-paycheck blues, and, for sure, when we can’t pay back that Payday loan.

The cycle of spending and hopelessness stops when you say it does…or when the collection agency comes a calling.