Payday Lenders Exposed — The Top 5 Tactics of Dirty Payday Loan Companies

May 15, 2008 · Filed Under payday loan

Its bad enough you have to get a payday loan. Now you have to worry about the dirty tactics of some lenders. The payday loan industry is not always regulated by state or federal laws. Take that in account when finding a good lender. Always avoid companies with any of the practices listed below.

1.Offer You a Loan Larger Than You Can Afford – This is the number one dirty practice of payday loan lenders. They will trap you into a loan you can’t afford to pay back. This leads to extensions or rollovers that end up costing you double the original fee. For certain people this can cause them to acquire another loan when the current one is paid. It is a continuous battle of debt in which the lender rakes in your cash.
2.Auto Renewing Without Your Knowledge – This usually applies to certain online lenders that put an “auto renewal” clause in your contract. This simply means that on the date the loan is due the lender will deduct only the fee associated with the loan. They extend the principal and charge you another fee. Some of these payday loan companies require you to actually call them to have the total amount of the loan deducted. Protect yourself by asking questions and always read the fine print of the contract.
3.Not Actually a Payday Loan Lender – This applies to online payday loan websites. Although they may look like they lend money in reality they are lead generators. They collect your personal information and pass it on to other online lenders. You need to avoid spreading your confidential information across the web. Only apply to the company actually lending the money.
4.Lender Tries to Make you Comfortable About Extensions – The bottom line is that extensions drown you in debt. The lender should be comfortable with the ability for you to payback the loan. If a lender is offering you an extension before you apply for the initial loan take it as a warning sign. It will cost you more and they will continue to collect your money every payday.
5.Fees and Rates are Not Disclosed – Every payday loan lender that you consider needs to clearly disclose all rates and fess associated with the loan. An online lender will have it clearly visible on their website. A payday loan store will have their rates in some form of writing. Know what rate you will be charged before agreeing to the loan. Always ask if there are hidden fees.

Using these five tips will help you get the best out of your payday loan experience. If you find a company that has deceptive practices, warn other people about them. On the same note, if you find a great payday loan company pass their good name along too.

Bookmark and Share: