When an unexpected and urgent need for cash appears, there is no cash available to solve the problem. Examples may include vets bills, car repairs, unexpected telephone bills or even urgent utility bills that appear each quarter instead of every month.
As individuals with low incomes have to prepay for things like electric and natural gas, such people can often find them selves with no lighting or heating if they have no cash for their key meter.
Families with young children can sometimes access a line of credit from the social who are unwilling to let a family with young children sit around in their homes with no electric.
For single people with less of a social safety net they are often trapped and forced into a doomed spiral of exploitation from unscrupulous lenders. Imagine the following scenario. Dave is a trainee electrician on a minimum wage. He was out of work for six months and defaulted on his bank credit card, his bank account went past his agreed borrowing limit and the bank closed it and sold on the debt to a debt collector. He was pulled up by the law while driving his van with two bald tyres. The officer was unimpressed with his attitude towards him and ordered a tow truck to tow his van away.
Dave was stuck with no car to get to work and no cash to get it out of the impounded facility and buy the replacement tyres. The daily charges for storage were mounting up. His friend he drank with told him to go on the internet and look for a no credit search pay day loan so he could sort out his travel problems. His bad credit would be no problem as there was no credit search.
Dave was open-minded and pleased that someone [would|could] be willing to offer him credit and he went on the internet to apply. After a certain amount of scanning and faxing paperwork to the loans company £350 arrived in his bank, enough for his tyres and the tow truck and storage fees. Everything went well until his payday when the pay day loans company took £437.50 from his bank account. He was able to pay his rent for his bed-sit, put some diesel in his van and then he was back to his empty bank account.
After a friend of his expressed his anger with Dave continually smoking his rollups and using his phone credit, Dave decided he was sick of having no money. Dave made a quick phone call and the pay day loans company were all too willing to lend him £500. Happy for their "help" Dave was able to have a few nights out and buy his own fags. His pay day came round again and £625 was removed from his bank account. Also, a couple of months ago he was foolish enough to give his visa debit card details to the debt collector that had [purchased|bought] the debt from his previous bank. The debt collector caught his bank account at just the right time to remove the remaining money.
Source : http://www.articletrader.com/finance/loans/payday-loans-oniline.html