Things to watch out for when taking out payday loans
Posted on January 11, 2008
Filed Under Payday Loans
Things to watch out for
Direct Application versus Matching Service
Please be informed that some websites are actually a matching your application to a lender that you will not be
Automatic renewals
Look out for payday loans that automatically renew every payday hence withdrawing the finance charge at every pay date.
Debt Trap
Don’t get caught in the debt trap cycle. The short term and high costs of payday loans may trap borrowers causing the loan to be extended at every payday in order to keep up.
Credit History and Bounced Checks
Unpaid loans usually mean bounced checks which incurs bank fees. If a history of bounced checks develop the borrowers credit rating will be negatively affected.
Legal Risk
Some lenders may use strong arm tactics to coerce repayment, eg threat of criminal charges, legal action
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