5 Payday Loans Myths You Should Stop Believing
Payday loans are amazingly helpful during a temporary economic crunch. They offer speedy and convenient financial aid via simplest application procedure with guaranteed instant loan approvals, which help you meet emergency expenses. Despite their brilliant features, they are very crucial to deal with so it is important for you to know what you are getting into before applying these cash advance loans. Unlike conventional bank loans, instant short term loans need to be paid back right away or the interest rate will trap you in a debt cycle.
Popular Myths About Payday Loans That You Should Not Believe
1. Lenders Prey on Low Income Consumers
It is often believed by many people that payday loan lenders are in the business to make money by lending short term loans. They would lose money if they cater poor consumers, however it is not true. Payday lenders do not differentiate on the basis of poor or rich all they need the consumers to meet the basic eligibility.
2. Consumers are Cheated On by Hidden Fees
There are rumors that all the lenders cheat the consumers though hidden fees and charging extra interest. All these allegations are false because every US State has regulated payday lending and closely monitor loan transaction in respect of consumer’s protection. Moreover, the lenders are strictly asked to thoroughly spell all fees in the terms of agreement. If consumers do not understand the terms then they can ask about them or find another lender.
3. Lenders Seek Borrowers Who are Unable to Repay
There is np benefit for a payday lender who targets people who can potentially be a default. The interest rate may surely increase, but only as a penalty for failing to repay on time.
4. Borrowers Are Trapped in Never Ending Debt Cycle
Though online payday loans are defined to help people in short term emergency cash needs, many people are still afraid of borrowing them because of the fear of getting trapped into a forever debt cycle. Whereas as long as the consumers repay the borrower loan amount on time, they do not have to worry about any debt.
5. Payday Lenders Sue Borrowers in Case of Delayed Repayment
It is not possible for every borrower to meet the repayment criteria of short term cash advance loans as it is very strict. The repayment is due in usually in two or four weeks depending upon the borrower’s pay cycle. So, if any borrower encounter with non sufficient funds they will be required to pay late fee but there is no lawsuit that allow the lenders to directly sue the borrowers.
Likewise any other service, instant cash loans also have some cons but they are reliable. Due to their quickness and convenience they need extra attention from both the creditor and the debtor. Thus, instead of believing in rumors, the consumers must conduct thorough research about the lender, perform deep study of loan agreement and trust their instincts to take an informed loan decision.
