With the need to get payday loans, many U.S. citizens turn to government agencies or nonprofits for help. Payday loans involve quick cash which can be obtained at any branch of the bank. There is a slightly more common and accessible option for taking out a payday loan that is available online. Everything is solved in a few minutes. You just applied for a loan.
Loan transactions in the United States
Note that payday loans, as you can see at https://directloantransfer.com/ combine short term loans with high interest rates. Such sample credits are usually paid the day after receipt of the loan. An annual interest rate on current loan types is extremely expensive, i.e. 390% and more.
Since previous years, the use of payday loans online has grown significantly. Payday loan transactions have used fraud and various illegal activities for the benefit of financially disadvantaged clients who are trying to receive such loans.
Consumer protection laws
the FTC applies various consumer protection laws in this area. The agency has filed numerous lawsuits against payday lenders:
Misleading or unfair advertising and billing in violation of Title 5 of the FTC Act;
Failure to comply with the disclosure requirements of the Truth Provision Act;
Violation of the rule of credit practice prohibiting provisions on the appointment of wages in contracts;
Make the loan conditional on the prior authorization of electronic funds transfers in violation of the law on electronic funds transfers;
The use of unfair, deceptive and illegal loan collection methods.
The FTC also recently filed lawsuits against consumer fraudsters trying to collect fake “ghosts”loan debt that consumers don’t have. In addition, the FTC has taken legal action against companies listed on Native American reservations in an attempt to circumvent state and federal consumer protection laws.
Payday loans Principle in the USA
A payday loan is a quick way to get money for a short period. Millions of Americans work hard every day to pay their bills on time. Nevertheless, many of them resort to a personal loan to meet their urgent needs.
To get a payday loan, the borrower must provide his personal data, have an account with a relatively well-known bank and also have a guaranteed monthly income. Lenders do not check the borrower’s credit history or do any other research to determine the borrower’s ability to repay the loan.
Where can you get Payday loans?
In the USA, payday loans can be obtained on credit at merchandise stores, pawn shops, 1-800 toll-free numbers and websites. Borrowers who apply for a loan through the website should complete an online application form or send it by fax. The loan, along with the accrued interest, is repaid by debiting the borrower’s bank account on the day the salary is credited.
Borrowers under control
Recently, online loans have come under intense scrutiny as many of them renew automatically if they haven’t been canceled since the last repayment. Therefore, borrowers are advised to read the agreement carefully before agreeing to any terms and conditions.
What is the loan rate?
With the help of payday loans, a borrower can receive from $ 50 to $ 1000 for 2 weeks. Compared to other types of cash loans, payday loans are much more expensive. While the effective interest rate on a credit card is 57% on average, and on a personal loan is 426%.
What could be changed in 2021?
There are certain risks associated with this type of loan. Due to high interest rates, borrowers with poor credit or those in financial difficulty often have difficulty repaying. This often forces them to take out short-term and expensive repetitive loans. This fact can lead to complete bankruptcy in the country in a relative period of time.
Borrowers, who decide whether or not to take out a personal loan, should keep in mind that this type of loan is only good for the short term in case of urgent need. In order to avoid the urgent need to get money, you can request a savings deposit, replenish it monthly, set a monthly spending and savings plan, and transfer non-urgent spending in the future.
What if the lender breaks the law?
If the creditor has violated the law before the payment of the salary, a borrower must contact him in writing, specifying the nature of the offense. Thus, provide all the evidence to support the complaint.
If the creditor has indeed broken the law, he must return the customer’s check and any service charges paid. The customer still has to repay the loan. However, the lender will be required to pay the customer five times the transaction fee, but not less than $ 15 or more of the customer’s face value prior to the payday.