It’s hard to fully understand how counterfeiting works, but we know that it does exist. A few years back, when the housing lending industry was booming, hundreds of companies were popping up overnight with “planning and marketing” professionals whose primary service was to find potential borrowers and help them qualify for the best loan.
They were paid very well. Unfortunately, this immediately attracted another bunch of”?in the knows?” “planning and marketing” professionals whose primary service was, ironically, helping their clients who barely knew the industry to qualify for the loan they were being offered.
The con artists began successfully obtaining credit and financing for thousands of would-be borrowers.
Payday loans are expected to be an even bigger problem in the current economic environment: as more and more credit offers are obtained solely by deceptive marketing strategies, we’re seeing companies disappear instantly, and those who do manage to obtain credit lines are reserved only for those who can pay off their new debt within term limitations. The whole lending and credit industries are Rapidly progressing towards economic disaster, if doing so isn’t enough, pass us by, we don’t need your money.
The only thing consumers have in their possession to protect themselves against potentially predatory lending is knowledge and an appreciation of what they can do about it.
Sometimes, awareness is simply a matter of selective avoidance: when the truth is less appetizing, it’s easier to simply postpone doing what you know to be the wrong thing.
Let’s be clear about what payday lenders represent, they provide quick cash at a high-interest rate in order to disburse the funds in a timely fashion, typically in one short writing period. What they often cannot (or at least, rarely) do is explain their interest rate and fee structure upfront, leaving the consumer in the dark as to how much they’re paying up-front.
They’re in business to make money…period. Their entire premise depends on that. The one thing that is beyond their control, though, is the fact that some states have banned payday loans.
As this site clearly implies, if some payday lenders are operating in your area, you need to find a different company to do business with. But if you can find a true company that operates in your state, that is the one you should be working with.
This may seem like common sense, but one of the biggest issues that payday lenders have is that they’re regulated as “specialized lenders,” not banks. Because of that, most of them want to have as much of the “techie” stuff (including fancy lights, location, telephones, computers, etc) as possible hidden.
That means you’ve got to do some real work if you want to protect yourself.
And it’s not just about having your credit hit, it’s about your peace of mind and your wallet.
Here are some of the problem areas:
Payday loan direct lenders are a bit like mini-banks. Their whole incentive is that they can charge whatever they want for a loan. Their whole business model is consumer-driven — and that consumer has to hand over her money to an expected short-term loan because the lender has a really good feeling about her.
Because of that, when their loan gets into trouble, they can threaten to take your money altogether. Why take a risk? For example, about two years ago a major direct lender was taking applications online, would give customers special deals on their loans, and even offer deferred payment plans.
Then something happens — the economy tanked. Thousands of Americans lost their jobs whose money was tied up in asset foreclosures. They were in danger of losing their homes and their financial lives.
As many were hurt by the economic downturn of the morning, many payday loan direct lenders were seeing a rise in loan origination fees. So much that one reputable lender reported increases in their loan origination fees from $20 to $50 in a single day.
The climate has changed for many lenders…
But what about you? How’s it working out for you? Are your payday loan direct lenders responding to what’s going on in the economy…and are they adding increasing fees to their loans?