Today more and more people are turning to
cash loans in order to satisfy their short-term needs. With so many consumers facing shaky employment situations, foreclosures, bruised credit scores and feeling ultimately strapped for cash, the demand for
pay day loans has greatly increased over the past year.
While certain laws are put in place to protect consumers from predatory lending, it is ultimately up to the consumer to find a reputable cash loans company and to borrow responsibly. By "borrow responsibly" I mean: not borrowing more than you can feasibly pay back with your next pay cheque (or two), not shirking your responsibility to pay the money back as quickly as you can, and using your pay day loans for actual emergencies (rather than entertainment or unnecessary shopping sprees).
Next, there are some things you should look at when searching for a pay day loans center - either a retail location or online operation. First, the amount of the loan should not exceed 25% of your gross monthly income. If you're offered more, beware. Also, be aware that you should not qualify for more than two short-term loans at one time. In some cases, consumers have been told they should take out four ?500 cash loans, rather than one lump sum ?2,000 loan. In reality, the man should have assessed his situation going by the 25% or less rule and then remembered that 99% of all pay day loans lenders only allow you to take out one loan at a time. (The other 1% probably aren't legit.) Thirdly, you should never pay more than ?15.50 in finance charges and fees for every ?100 borrowed. This is the industry standard and if you're paying more, you probably shouldn't be. If you are in debt for over 45 days, then your lender should offer you an interest-free repayment plan first. You shouldn't be allowed to borrow more until your first debt was repaid and you should try to avoid rollovers at all costs. Lastly, legitimate pay day loans operations report to a financial service that enforces the lending standards. If your lender isn't familiar with the law, you should be wary.
All in all, pay day loans are a tremendous asset to the community - particularly for people who've made a few mistakes but wish to start over, or for people who were hit by unforeseen circumstances. If used wisely, you can find great financial freedom for less than ?100.
