When you hear the term “loan shark” what image comes to mind? Perhaps you envision some ruthless mob boss or a shady character in a dimly lit bar.
Loan sharks don’t have a good reputation. They lend money at astronomical interest rates, plus there’s the potential for bodily harm if you don’t repay the debt on time.
Now, your local payday lender may not break your legs if you fail to pay but they also participate in predatory lending practices similar to those used by loan sharks.
Payday vs. Online Lenders
high-interest rate lenders usually fall into two categories - payday lenders and online lenders. Both payday and online lenders charge very high-interest rates on loans but offer different repayment options.
Repayment on payday loans is generally made in full on a set future date. It is not unusual for full payment to be expected within two weeks.
Online lenders are often located on Indian reservations or other areas outside of the U.S. and charge high rates for loans up to $5,000.
Repayment on online loans are paid in monthly installments but, you have the option to refinance the debt if you don’t believe that it can be repaid within two months.
Common Predatory Practices
Unfortunately, there are limited options available to you if you’ve fallen prey to one of these “modern-day loan sharks.” The best way to resolve your problem is to repay the debt as soon as possible. However, that may not always be an option.
Expect to pay additional fees if you are not able to repay the debt. Payday lenders will usually refinance the debt for another 2-4 weeks but they tack on the fees. Charging $15 for every $100 borrowed isn’t unheard of.
Online lenders themselves don’t refinance debt. If you’re unable to refinance with another lender, then you’ll surely be faced with late fees and other charges. Online lenders only accept ACH payments. This means that if you don’t have money in your account, you’ll be charged NSF fees from your bank as well.
Overcoming Predatory Practices
The best way to overcome the predatory practices of online lenders and payday loans is to avoid them in the first place.
If you must take out a high-interest rate loan, do your best to pay back the loan on time. With online lenders, you can try to get the loan refinanced. If not, your only option is to make the monthly payments on time.
In certain cases, you have the law on your side and can renegotiate the terms based on interest rates set by your state’s usury laws.
1/16/2019 01:30:12 pm
I was talking to a friend of mine the other day about her interest in debt counseling services. It is nice to know what your options are like online or other. She would really benefit from a professional opinion as well as the idea that they should be a trusted service to stay away from scams.
1/25/2019 07:24:00 pm
I'm looking at getting a small loan here soon. Going with a payday loan would be a good idea. However, I will want to see the different options that are available to me.
3/27/2019 07:25:59 am
The most important information you have share on this page about the four benefits of cashing in a payday loan because approvals do not depend on credit scores. While traditional loans are approved based on applicant’s credit scores, companies that give payday loans do not perform credit checks. All that is needed is a paystub to prove the ability to pay back the loan and a chequing account to deposit funds into. Getting a payday loan will not affect your credit score either.
3/27/2019 06:00:38 pm
Thank you for these tips on getting a payday loan. My husband is really needing a loan. I'll have to look into finding the best place to get it.
5/9/2019 12:33:18 pm
That is interesting that repayment for payday loans are made in full on a future date. That is something I would want to have for a loan payment. This way, I would be able to get it done and over with all in one payment.
8/6/2019 06:18:27 am
Nice Blog, I like your content. I loved the game Payday 2 Hotline Miami. But I saw something much cooler in it. I am talking about that Brown <a href="https://jacketshub.com/product/payday-2-hotline-miami-varsity-bomber-wool-jacket/">Varsity Bomber Wool Jacket</a>, the one which the chicken man was wearing.
I thought that it made sense when you said that one thing to consider when you are needing to take out a loan is that money is constantly being saved up to repay them since loans are typically due on a scheduled future date. I have been thinking about taking out a loan but I haven't been sure what the deadline for repayment would look like. I will be sure to consider talking to my lender about the date that the loan needs to be paid for in order to ensure that I don't get into trouble.
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