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Are you worried about falling victim
of payday loan cons? If so, keep reading. In this article, I will share with
you some of the common scams and how to avoid getting swindled by illegitimate
payday loan companies.
Many of us turn to payday loans to
help us out during a cash crisis such as paying for emergency medical expenses.
The problem is that online payday lenders crop up on the internet every other
day. They try to entice customers by offering hassle free loans with no credit
checks. When you need cash urgently, its easy to fall prey of companies that
are just out there to swindle you.
Payday loans are one of the options
available for short term funding. However you need to ensure that you only
borrow amounts that you are able to repay. Default charges and late fees on
these loans can quickly put you in a debt spiral. However, when used
responsibly, these loans can help minimise your cash worries until your next
payday without the bureaucracy of normal bank loans.
One common scam is where the payday
lender offers you very low interest rates without a credit check. All you do is
fill out an online application which asks for your personal details. The lender
will usually decline your application. They usually have no physical address or
fake contact details on their website so there is no way of tracking them.
However, they already have lots of
your personal details and use these to commit identity theft. They borrow in
your name, default and the payday loan companies come after you for repayment
of a loan you didn't even know about.
Here are a few ways to minimise the
risk of being scammed by fake payday lenders. Firstly always compare the
interest rates offered by different lenders to get an idea of the average rate
- if it sounds too good to be true then it probably is. Companies offering
unusually low rates need further investigation as this may just be bait.
Secondly, look up the company on
search engines such as Google. You will find lots of information about them. If
they have scammed people in the past, it is quite likely you will find the
information there. Don't just go by the customer reviews on their website as
they could be fake for all you know.
Thirdly, check if their website
carries a CFA (Consumer Finance Association) seal or if they are actually
members. CFA collects and maintains information on consumers' and businesses'
credit behaviour. This way, consumers are protected from being taken advantage
of by sham payday lenders.
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