Banks should offer more short term loans to those Americans who are looking for quick ways to finance their debt, one expert has said.

Dr Chris Robinson, a finance professor from Canada's York University, believes banks should create small unsecured loans products for people who need emergency cash.

But after having done extensive research on unsecured loans in the US, Canada and Australia, he believes there should be a limit on fees, reports the Age.

"I will be recommending that the federal government implement national legislation that will cap the fees and charges loan businesses can charge consumers," he stated.

Short term loans tend to attract people who have a regular job and bank account, but a poor credit rating.

According to Georgetown University's Credit Research Center, half of all short term loan borrowers in California earn between $25,000 and $50,000 a year.


Last month, the California Reinvestment Coalition revealed that nearly two million households in California are regular short term loan customers.

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