Let's face it. Payday loans are based almost completely on the honor system. Their entire business model relies upon the assumption that the borrower will be honorable enough and or disciplined enough to pay back the loan month after month after month.
It sounds crazy when you actually think about it but in reality, the majority of people have every intention of paying back the loan. Borrowers generally repay loans for the first three to six months until things inevitably get out of hand and they start looking for a way out.
Something always comes up...This leads to late payments, a missed payment or two and finally a flat out default and refusal to pay. I know because I've been there way too many times. Most people don't take out a loan with the sole intention of defaulting on it. The majority of us are just not wired that way...but "shit happens".
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