Not long ago, Google made the announcement of “… banning its system of advertisements regarding payday loans and other related products.” Collectively, the internet in general and the financial world more specifically, have let out a sigh of relief. Later, after reading the official report and taking a moment to think about it, some began to question this decision. Did Google make this decision based on its moral code? Is it up to Google to decide what is morally right or wrong?
Opinions vary greatly on the subject. Ours are falling in the middle of this issue, payday lenders are misleading predators and their ads target those who have low incomes or are desperate to get the money they need.
Convenient and timely access to any financial assistance is something that many Canadians are looking for. We believe that this is a service that must exist and we are working hard to offer it and improve it every day.
In a recent statement, Google wrote “… today, we want to share with you an update that will take effect July 13, 2016: we will ban payday loan advertising and other related products from our advertising system. . We will no longer advertise loans where repayment must be made within 60 days of the date of grant. In the United States, we also want to prohibit loan advertisements with an APR of 36% or more. “
Advertising with Google is a big part of any marketing campaign. Millions of people use Google daily and if your company’s advertising is seen by even a tiny fraction of people, it will dramatically increase traffic to your website, blog or store. Google is a recognized name and the company knows it, we quote “This change is intended to protect our users from unfair and dangerous financial products and will not affect companies that offer loans such as mortgages, commercial loans, auto loans , student loans or revolving lines of credit (credit cards). “
The company does not intend to get rid of all alternative lenders; it is only trying to protect its users from the dubious and predatory practices of payday loan companies.
What is a payday loan?
In case you were not aware of the new debate about payday loans and are not sure of the definition of such a loan, here is a brief overview:
- Payday loans are usually $ 1,500 or less
- An approval the same day is usually guaranteed
- They are short term loans, which can be repaid with your next paycheck
- Their interest rates are extremely high; some have a rate up to 500%
- They have very little reasonable diligence, you just have to prove your income and your address.
Payday loan borrowers often fall into what is known as the payday loan cycle. It is a borrower who borrows on his salary to be able to repay the first. Often this will take months and the borrower will have to re-borrow until he can no longer take loans to repay the previous ones.
Why are payday loans so popular?
You are probably wondering why someone would like to have a payday loan when these are very expensive. The fact is, payday loans are convenient and relatively easy to obtain. When you are faced with a personal or financial emergency and you do not have surplus money, a payday loan may seem like the only option available.
This is why a payday loan advertisement can be very damaging, it directly targets those who are desperate with nowhere to go.
Alternatives to payday loans
There are countless and excellent alternatives to payday loans. The online loan industry is constantly growing. This year alone, we have witnessed the success of some of our peers, helping many Canadians who, like you, have been approved for a loan when traditional banks close their doors.
At Prêts Québec, we are proud to be one of the best alternatives to payday loans in Canada and we will continue to listen to our clients by ensuring that they have all the financial tools they need to succeed in their financial goals.