Posts Tagged Payday Lending
Savings Up; Short Term Loans Still Critical in 2009
Posted by YadYap in Payday Borrower on February 21st, 2009
Most economists are predicting 2009 to be one of the hardest years the economy has seen in decades. The following points appear as polar opposites, but will work together to help people make it through the tough times ahead:
- Americans are saving more and spending less
- Affordable short term loans are critical for helping people stay on their feet
American’s are starting to save more according to an article in the New York Times titled “Consumers Are Saving More and Spending Less.” An increase in the savings rate will slow the economy in the short term as businesses will see smaller revenues. However, more saving will bring long term benefits to the overall health of the economy.
The smart way to use debt is not using it to acquire things you cannot afford, but rather using it as a tool where taking on the debt makes more sense than the alternative.
Debt is a much needed and very useful strategy in our world. For example if I need a car to commute to my job (if there is no public transportation available), but do not have the cash on hand to buy one, it obviously makes sense to use debt in order to have a job and make money.
At the same time there must be a balance between spending, using debt, and saving. The increasing savings rate is good! We want people as a whole to have some security or back up if they have expenses that exceed what they can afford to pay from their income.
You may wonder why this is coming from a company that is offering short term payday style financing. Regardless of the overall savings rate in our economy, or if the economic state is good or bad there will always be a need for an affordable short term financing solution. We do not currently believe there is such a solution available.
YadYap encourages saving and at the same time using debt wisely. We are committed to offering an affordable product that will allow our borrowers to make it from payday to payday when there is not a short term solution that is better for them. In the year(s) of economic uncertainty ahead many people may be faced with simply getting by until better times arrive. This is where YadYap comes in to offer the best solution for them.
Related articles
- How Are You Responding To The Economy? (davidrisley.com)
- Get Useful Tips About Top 5 tips on how to create a home budget (helpwithdebtnow.com)
- Consumers borrow less than expected (money.cnn.com)
- Top 5 Tips On How To Create A Home Budget (helpwithdebtnow.com)
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Clemson University Study Favors Payday Loans
Posted by YadYap in P2P Payday Loans, Payday Borrower, Payday Industry News on January 23rd, 2009
Clemson Universities Department of Economics study on payday loans concludes:
- No casual relationship between access to payday loans and bankruptcy filings for all payday loan borrowers as a whole (affirms YadYap belief)
- Access to high-interest-rate consumer credit correlates with improved household financial condition
Clemson Universities Department of Economics released a payday loan study recently that YadYap believes is noteworthy. This study was more than a simple study on payday loans. The study was conducted using data collected between 1990 and 2006. The purpose of the study was to determine whether or not payday loans lead to bankruptcy.
This study is a legitimate evaluation of important data and should be used by industry regulators when considering the types of regulation, if any, that should be made within the payday loan industry.
The researchers found two positive outcomes from the study. First, that access to high-interest-rate consumer credit correlates with improved household financial condition. Second, that there was no causal relationship between access to payday loans and bankruptcy filing rates for all payday loan borrowers as a whole.
Credible studies such as this should not be set aside. There is no reason that Clemson University would have to report anything other than the facts from a 16 year study of the payday industry. On the other hand, there are those in the industry that create a bad name for everyone by using less than ethical practices.
As for YadYap, this study affirms the belief we have that there is a need for this type of short term lending. YadYap is a marketplace where the best possible solution to short term loans will be offered to fill the need.
Related articles
- National Usury Limit Could Reduce Number Of People Paying Debt Until They Die [Predatory Lending] (consumerist.com)
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Obama and Payday Loans
Posted by YadYap in P2P Payday Loans, Payday Borrower, Payday Industry News, Payday Lender on January 9th, 2009
In an Associated Press article titled “Sector Snap: Payday lenders fall on Obama proposal“ there is mention of President Elect Obama capping interest rates nationally on payday loans at 36%. We think the likelihood of Obama enforcing a 36% rate cap overnight is low and would likely be implemented in phases. There is a large demand for short terms loans and liquidity, now more than ever, and factoring in default rates, marketing and operating costs, a 36% interest rate cap business model won’t work for most of today’s lenders.
You can almost be certain that Obama will make some changes to the payday loan industry. The question is who will be ready to fill the gap if the changes are drastic. Whatever the changes may be, YadYap will maneuver to fill the gap that is created. As we continue to plan and test our system and business model we are doing it with two possible scenarios in mind. First that the payday loan industry remains essentially how it is now, and second that major changes take place that alter the payday loan industry landscape.
In spite of the economic woes that abound we are excited for 2009 and look forward to delivering a platform that will change the way people get short term financing, regardless of changes that may be made to the current laws.
YadYap Logo Unveiled
Posted by YadYap in Payday Borrower, Payday Lender on November 3rd, 2008
YadYap has “unveiled” their logo! Check it out at YadYap.com.
We put quite a lot of time and thought in to what we wanted our logo to portray. We knew from the beginning that YadYap represented two different points in peoples lives. One of them is the person that is in need of short term financial help to make it through to their next payday. The other person has excess money to help someone in need, but also wants to see that money invested wisely so as to earn a good return.
Our circle represents these people working together in unison for the benefit of them both. Of course the word YadYap is payday spelled backwards and represents a change to traditional payday loans. Our tag line tells a simple truth; YadYap really is the best way for someone who needs a payday loan to get one.
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Prosper’s September 2008 Market Survey Shows Critical Need For Yadyap’s Short-term Lending Platform
Posted by admin in Payday Borrower, Payday Lender, Peer-to-Peer Lending, Underserved Borrower on October 14th, 2008
- Prosper’s September 2008 market survey shows a sharp decline in P2P subprime loans that are successfully funded.
- The report also shows that peer-to-peer (P2P) lending amounts are shrinking.
It is not news to YadYap that there is a dire need for a good solution offering short-term loans to consumers who otherwise would go without the ability to get any financing, or resort to a traditional payday loan. The payday lending industry takes a great deal of heat for high interest rates charged to borrowers.
This begs the question; who else can fill the gap that lies between conventional lending or current peer to peer lending and a traditional payday loan. The gap is wide and the need is real. Since Prosper’s inception there have been close to 200,000 Prosper loan listings go unfunded. Where have these people gone to meet their short-term need for money? Yadyap is central to solving the lack of subprime borrower representation.
It is also interesting to note in Prosper’s report that P2P loan amounts being funded are shrinking in size.
Year-to-date the average loan amount is $6,047, down 13% or $925 compared to the same period last year. In September 2008 the average loan amount was $5,544, down 23% or $1,631 from September 2007. This indicates that lenders on Prosper are being more cautious by directing their bids toward listings with lower requested loan amounts.
YadYap (payday backwards) will also fill the need of peer-to-peer lenders to fund loans with shorter terms, while at the same time helping someone with a short-term financial need.
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