The Rise Of American Lenders

USA Credit Guide
Part 1 The Rise Of American Lenders
Part 2 Online Credit Services In The USA
Part 3 Money Lenders For Online Credit

Where do you go to find short term loans, or indeed, any kind of credit? In the past, if the bank was not helpful, most payday loans (or cash advances) were only available through stores which specialized in cashing post dated checks or offering cash against your next pay check. In this article we look at:

  • The aim of our US online credit guide
  • The background of short term loans
  • A short history of the payday loan
  • Deregulation of the banks

However, since the unstoppable rise of online banking and credit that is available through the Internet there has been a surge in the number of businesses selling all kinds of credit through the online platform. Whatever kind of credit you are looking for, it can now be found online.

The aim of the US online credit guide

This guide has been written to provide help and information for anyone who is considering taking out an online loan. You will find the answer to most of your questions and there are chapters covering details about the different types of loans, finding a reliable lender and information about interest rates and credit checks. Another important fact to consider is the total cost of a payday loan and this is also explained.

About 2.5 million U.S. households use a payday loan every year

There are many facts and figures that have been published about payday loans. Reading some of these may also be beneficial so that you have more knowledge before borrowing. You can also read some interesting information about the credit crisis which affected so many people, annual events like Christmas, Thanksgiving and unique spending events like Black Friday.

Each chapter covers a different aspect of online credit so you have the choice of reading all of the guide or of choosing the appropriate chapter for an individual inquiry. We have also included a frequently asked questions chapter which covers most of the basic information about payday loans.

Some background to short term loans

Having some knowledge about how short term borrowing works and what to expect when you apply will hopefully help to take away some of the worries you may feel about applying for an online loan. Like all credit products there are advantages and disadvantages to short term loans and this is also covered in the articles.

A man searches online for credit options

An historical perspective

Just over a hundred years ago lenders began offering what were know as ‘salary purchases’. This involved offering a financial service to those who were finding it difficult to manage until they received their next pay check. The lender would buy the salary for a lower amount and the borrower would then pay over the whole salary once they had been paid. These salary purchases were the forerunners to modern payday loans.

During the 20th century, there was also a rise in stores offering a check cashing service. This was another early form of the payday loan.

During the 20th century, there was also a rise in stores offering a check cashing service. This was a service that lenders offered which meant that you could cash a post dated check and the charge for the service was a daily fee until the check date became due. This was another early form of the payday loan.

Deregulation of the banks

The banking deregulation that came about in the 1980s meant that many smaller banks, which often helped out those ordinary families who wanted small loans, went out of business. The larger banks saw no profit in short term small denomination loans and this situation resulted in a surge of companies offering short term loans but at higher rates than those charged by the large banks.

A traffic light next to a banking building

There was a massive increase in the number of businesses that began to offer payday loans with the number growing from around 500 up to over 22,000. Suddenly, payday loans had become big business which, over the years prior to 2008, became worth more than $46 billion. And by then, there were more payday loan lenders in the US than there were branches of McDonalds and Starbucks.

When payday loans started to increase in popularity there were less regulations than those that are now in force. This resulted in some families falling into serious amounts of debt. However, now the regulations for this kind of loan have been tightened up and there are limits on the amount that can be borrowed, the maximum interest rate that can be charged and strict rules that prevent unlimited rollover loans.

USA Credit Guide
Part 1 The Rise Of American Lenders
Part 2 Online Credit Services In The USA
Part 3 Money Lenders For Online Credit

About the author

David Warren

David Warren is an expert on personal loans across the United States. His career in banking has helped make David the loans specialist that he is today. He shares his analysis and insight into the personal finance industry on