When you are short on cash, a payday loan can supply the extra cash that you need. Whether you need to pay for an emergency car repair, a fee for your child’s sports team, or a critical home repair, payday loans give you the money you require. Finding an online payday loan is very easy. Thousands of lenders have now popped up on the Internet. The difficulty in securing an online payday loan is assessing the reputation of the lender. If a lender is not accredited by the Better Business Bureau, then you may want to keep looking.
Payday Lender Criteria
Before you enter all of your personal information into a payday loan website to secure a loan, you should consider certain criteria. The online payday loan company should operate a secure website so your private information remains confidential. If you find news articles discussing a company’s issues in maintaining the privacy of its customers, this is good reason to choose a different company. The lender should have a website that is easy to use and customer service representatives available for your questions and concerns.
Another important factor that you should consider is the ultimate cost of a payday loan. You should be sure to understand all fees. Loan fees for payday loans can quickly escalate, and you do not want to be surprised with a fee that amounts to as much as 25 to 40 percent of your loan amount upon signing an agreement.
Legal Issues
Online payday loans have posed a variety of legal issues for consumers. Some attorneys argue that providing online payday loans with high fees to young adults and impoverished people is a form of unconscionability. Unconscionability is a legal defense that may be raised to defeat the validity of a contract. It occurs when bargaining is grossly one-sided. Because many people are in a desperate position and resort to online payday loans as a last resort, they may argue that the contract is “unconscionable” and therefore invalid.
Banks may also employ predatory lending practices by handing out payday loans to people who may never be able to repay them. These may be practices that are in violation of current consumer protection laws.
Benefits of Online Payday Loans
Online payday loans can be conveniently secured from the comfort of one’s home. They may also provide much-needed funds to people who are facing financial emergencies.
Risks of Online Payday Loans
A major risk of online payday loans is that interest can rapidly accrue and make the payday loan more expensive than you ever anticipated. Consumers should be aware that numerous payday loan scams exist.
You should seriously consider all the complexities of securing an online payday loan before signing an agreement. It is a bad idea to rush into this type of agreement, because significant fees can be attached to these loans, making them virtually impossible to repay for some borrowers.
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