The industry of the payday loans has evolved with many ups and downs. It started off in rough waters because people were naturally suspicious of non banking financial institutions lending to small customers who are refused a loan from the bank. However, today the industry is mature and flourishing in the midst of an economic crisis. This is not hard to understand, considering the fact that the recent financial meltdown has severely strained the household economics of a number of people. These people need an extra stream of money flow when they need it the most, which is mostly during tough times such as an emergency that may or may not be financial in nature, protecting assets like home and car when one fails to pay the monthly bills, etc.
However, instead of being the traditional last-resort loan option once for people who were unable to secure one from larger banks and other financial corporations, these same payday loans today are increasingly becoming a convenience that everyone is using for short term loan obligations to avoid the hassles and paperwork of a bank loan. Even when people can get loans from a bank, they prefer to borrow from these small lenders simply because of the ease of obtaining a loan. One of the revolutions that this industry has seen is the emergence of paperless lending.
Paperless lending, as the name suggests, doesn’t need any paperwork to be done. All the details that are needed for the payday loan industry to operate are submitted online through an application that is simple and straightforward. There is no need for the submission of any signed paperwork. In fact, today, the industry doesn’t even require the customers to send in fax copies of their credentials, collaterals or even signed consent forms, which has been famously called the faxless payday loans.
The concept of paperless lending is a great boon to a number of people at the bottom of the pyramid but is seldom acknowledged by the financial experts or mass media in general because it doesn’t cause ripples in the financial industry. Instead, it is a silent helper that benefits the lower and middle class of a society. Since it is not as glamorous as the billion dollar loans that grab headlines, they are seldom given the credit they deserve. By lending money to those sections of our society who most need the money, the payday loan industry is doing a lot of good to these people and providing conveniences they could only dream about. Paperless lending is somewhat similar to the microfinance revolution that has taken place in the developing world like Bangladesh and India, which has transformed the way the poorer sections of these societies borrow money. However, by combining ease of obtaining a loan with the benefits of no paperwork, the payday loans industry has redefined finance for the lower segments of our society.
