As the popularity of payday loans soars beyond conventional credit from major lending institutions, controversy is never far away. Just like any burgeoning industry, unscrupulous dealers have jumped on the bandwagon, much to the chagrin of genuine quick cash creditors. Thus, plenty of myths and misconceptions exist about the industry in general and emergency loans in particular.
EmergencyPaydayLoan.com does not provide these loans, but acts as a conduit between borrowers and providers. In the article below, we attempt to debunk some of the myths surrounding the emergency personal loan industry:
Credit Scores Are Compulsory for Any Type of Credit
The Equal Credit Opportunity Act requires creditors to evaluate borrowers based on their creditworthiness alone. Accordingly, major lenders, including banks, mortgage companies and credit card companies, take full advantage of this law to divide borrowers. They assess your credit worthiness from past records to determine whether you qualify for assistance or not. In most instances, high-risk borrowers receive higher interest rates than low risk customers do.
This is not the case with emergency personal loan providers. Here, the aim of the loan is to assist borrowers who have fewer credit options. Your weekly or monthly paycheck acts as security for the loan. Thus, you do not require a credit score in order to qualify.
Emergency Payday Loans Are Scams
Payday loans are part of the lending industry. While some states have placed tight regulations on the interest rates and fees, the industry itself is nonetheless robust and legitimate.
Emergency personal loan agencies are not scammers, albeit fishy characters can be found in the market, as with any large industry. The Community Financial Services Association of America (CFSA) duly registers genuine loan providers. EmergencyPaydayLoan.com also deals with legitimate and reputable lending services only.
Emergency Payday Loans Charge Exorbitant Interest Rates And Fees
Critics assert that emergency personal loan providers overcharge on interest rates for their services. However, this is far from the truth due to strict regulation by the Federal Trade Commission (FTC).
Typically, a payday loan is valid for two weeks at an average rate of 15 percent. In most states, it is illegal to rollover the debt until it is fully settled. Even in places where you can rollover the loan, industry best practices disallow payday providers to do so more than four times. Thus, the argument that annual percentage rates for these loans can reach triple digits is essentially flawed.
In terms of loan processing fees, most borrowers are quite familiar with the Truth in Lending Act that requires full disclosure before payment of any fees. Accordingly, you will receive complete information regarding fees, payments and penalties with regard to short-term loans from EmergencyPaydayLoan.com.
Emergency Payday Loans Contribute to Further Debt
It is only those who do not repay their loans on time, usually because of improper budgeting prior to taking out a loan, that can find themselves in more than before. As with any loan, if it is not repaid on time there are fees. For this reason, EmergencyPaydayLoan.com strongly advises planning out every detail of your loan and its repayment before you actually take out any money.
Overall, any market that grows exponentially becomes a target for scrutiny. This is exactly what has happened in the emergency loan industry. However, some of the criticisms leveled against the industry are myths that borrowers should not take seriously.