Payday Loans 101
Posted on Sunday, May 16th, 2010 at 2:10 pm in Helpful Payday Loan Info, Miscellaneous Cash Loan Info
For so many reasons, rational and irrational ones, payday loan remains at the hot seat. Critics never leave their eyes on it maybe because no matter how hard they try to mislead the people, borrowers just can’t help but keep coming back to this cash loan option. And who are these critics?
Well, if you are to read the internet, you can see that those who go against payday loans are those who go in favor of bank loans. Basically, here are the reasons why they keep on hitting payday loans.
The say it’s unbelievable APR
The usual and most often stone thrown into payday loan companies is the APR. This is not denied and was never hidden from borrowers though. In fact, there is a rule or law which says that everything should be disclosed to all customers including any extension fees. Common trend is, for every $100, you are to pay $25-$35. You will be asked to write a post dated check excluding the interest and it will be taken from your account on your payday.
Critics say that this is utterly unbelievable because it is like stealing from the people. They even say that cash loan companies are taking advantage of the customers’ situation and this is their way of keeping them in debt so that when they cannot pay the initial interest, they will extend and in the long run pay a higher interest.
They say payday loan plays a dark tactic
Since borrowers are always asked to write post dated checks, critics say that companies are into dark techniques. How is it done? Well according to them, lenders would intentionally take out the money from the customers’ account even if they know that there is still no fund in it. Consequence is, the customer will be charged by his or her bank and then the payday loan company will as well ask for charges because there was no fund in the check.
The Loan Extension Technique
Normally, when a person is in need, he goes to the easiest solution to get quick cash. Now if it’s payday time, another problem arises again. What happens is instead of paying the first loan, the customer ends up extending it. Critics point out that it’s okay to allow customers extend the cash advance but it should be with a minimal cost. They say that extensions are lenders’ way to bury the people into debt because the more they extend, the higher the rate they have to pay. Meaning, there will come a time when the interest amount is already far higher than the principal amount.
Well, none of these can be denied. But the point is, this is not what real payday loan is. Probably the mistake is with the company or the lender but never with the payday loan itself. It was created with all the purest intentions but the problem usually arises with the executers. This is why a wise borrower should know how to check on the lender so as not to be deceived.
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3 Easy Steps to Get Your Quick Cash
Complete the short form.
Receive your approval and confirm loan.
Cash deposited into your account.
