Things to Beware of With Payday Loans
There’s an eye-opening and well researched piece on payday loans on an interesting site called Wake up U.S. The post is called Internet PayDay Loans are hazardous to your sanity and bank account and gives some stern warnings about the dangers of payday loans and calls into question the laws that allow these companies to operate and the slightly shady tactics that they use.
In a few moments, in some cases longer, you will receive an approval in your email inbox. Within a day or two, sometimes three, you will see that this company deposited the amount requested into your checking account. The first payment on this loan will usually be due within a week or two, depending on the company.
However, and this is where it starts to get ugly, monetarily speaking. The first payment due is just the interest and fees. The second payment due is also just for the interest and fees, and on and on it goes. Lets say you applied for three hundred dollars. If you do not completely repay this in the first week, this three hundred dollars can turn into three thousand dollars.
I believe first and foremost in personal responsibility but the brutal terms that allow that kind of escalation of charges probably could benefit from some legal confinement.
The article goes in to mention that each state in the U.S. has different laws for these companies and with the Internet providing a massive shell game opportunity, the net result is pretty much that a payday loan company can get away with almost anything (including automatically withdrawing money from a client’s bank account!)
All I can suggest is to check with the Better Business Bureau to find out any possible patterns of complaints against any payday loan or cash advance companies that you are wanting to do business with.
High Cost Payday Lenders Advertise Everywhere from the BBB website which goes into some more detail about the practices of these lenders and offers tips for consumers.