Payday loans have often come under
criticism, with the spotlight placed on the ease at which loans can be applied
for, as well as the interest that customers are often thought to pay. As a
result of this, some consumers have often questioned their legitimacy and have
voiced their opinions online and in mainstream media. This has caused quite a
bit of confusion and even mistrust concerning the industry as a whole.
However, whilst some lenders will
come under justifiable criticism, the majority of lenders do act responsibly,
and are keen to see customers pay back all of the money they borrow (including
interest and charges) as soon as they can, on their next pay day for instance.
This means there can be a big difference between some lenders that you come
across.
But how can you tell the difference
between them? What makes one responsible, and another a little less so? Well
there are a few things that differentiate those legitimate lenders from
unscrupulous ones, here are some of the main things you need to consider.
Clarity of information
Do they display all of the necessary
information on their website in a clear and comprehensible manner? Things like
the amount of representative interest that you'll need to pay, as well as their
contact details are a good sign that the company are not trying to pull a fast
one. Also check to see their credit license number, this would normally be
placed in the footer of the website.
Regarding interest, legitimate
websites will show you how much interest that you'll need to pay, and break
this down for you depending on how long you'll need the money for. Check their
terms and conditions are available on the website, as well as a lending
criteria. Such in-depth information can set apart decent lenders from poor
ones.
Regulations and checks
Ensure they employ a certain degree
of regulation as to who they lend money to. This doesn't necessarily mean avoid
lenders who will lend money to people with bad credit, as this is generally the
case with most payday loans. Rather, check they will only lend a certain amount
based on your own circumstances. This will prevent you from being able to
borrow an amount that far exceeds what you can actually pay back.
Responsible lenders will only lend
you a certain amount, depending on how much you earn, so be sure to use these
lenders to avoid borrowing more than you can repay, and thus avoid getting
yourself into any awkward financially circumstances.
First time borrowers
For any first time borrower, having
a limitation on the amount you can borrow should be implemented. Whilst this
may sound a little unfair, it's done so to safeguard you as well as the lender.
Payday loans do not use lengthy paperwork to establish the trustworthiness of
applicants, it's all really based on how much you earn.
So, if you're a first time borrower,
in all likeliness you'll only receive half, or quarter of the amount you
request. It's not uncommon for a lender to set a limit of £400 for example, for
first time borrowers. After you've successfully paid off your first amount, if
you ever need to reapply for additional funds, then you can request more in
future.
Links to partners and financial
bodies
Openness and honesty is very much
the theme for responsible lenders, and this is exemplified with links to
external financial bodies as well as any financial partners they work with. For
example, for payday loan brokers, it's important that a lender lists all of the
payday lenders they work with, so you can clearly see who the company works
with.
ไม่มีความคิดเห็น:
แสดงความคิดเห็น