Recent investigate has found that borrowers are not wholly and fully aware of the risks complex when taking out a short-term loan. The investigate added indicated that payday loan lenders were not fully transparent with their fees and the risks involved.
The amount of borrowers taking out these short-term loans has quadrupled since 2006. Why is that? Because these loans are seen as a quick and easy way to passage short-term credit. They are fast because there is no prestige checks performed and therefore borrowers with bad prestige and low prestige scores can apply for this type of credit. But the inquire is: Do these borrowers understand the risk complex when using a payday loan?
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It seems that most borrowers do not. Some payday loan lenders do not openly advertise their fees, especially when the loan is continued past its predetermined refund date. Borrowers are also not being given advice in a situation where their refund is late or not possible.
The payday loan lenders are assuming that borrowers will repay the loan on the required due date, and are thus neglecting to inform their customers of the extra finance charges levied when repayments are not made on time.
In an endeavor to ensure that consumers are aware and understand exactly what they are agreeing to, there is a call being made to regulate the information the loan lenders are required to give consumers. In the meantime, borrowers are advised to read the fine print on the offer presented to them before agreeing to it, and to make sure that they fully understand the risks involved.
PayDay Loan Lenders - A Call for More Transparency Low Cost Payday Loans
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