Important Information About Payday Loans
Payday loans are very popular, because they are easy to get, your previous credit record is not an issue with the lenders and they are provided typically within twenty-four hours of applying. They are sometimes the only way out when there is an emergency, say a sudden emergency, like an illness or if you are required to shift residence suddenly. They are considered a blessing and the loan providers do seem a god send.
The flip side of these loans is never considered. The effective APR or Annual Percentage Rate can work out very high because it calculates the compound rate on the fee payable calculated across the year, and the interest component is also charged on any upfront fees that have been paid like the origination or participation fee.
Such expenses on a loan is never envisaged, and the lenders get trapped into either taking more payday loans to pay off the previous loan, or you are asked to roll the loan for a further period. Both the cases can be tricky. Even the President of the United States of America, Barack Obama called them loans predatory and trap borrowers in a cycle of debt. In fact, it is believed that this cycle or rollover, is an essential part of the industry’s business model.
Of course, lenders have their side of the story. First and foremost, the loan is expected to be held for not more than a few weeks. It the rates were to be made on par with credit cards and other loan instruments, it could not justify the risk lenders take for lending small unsecured sums of money. Their operating expenses too would not be covered.
Nevertheless, in a free market, where consumer is king, his interests have to be secured at all costs. Regulators the world over are putting into place the first ever rules on payday loans to help cash strapped lenders from falling into an ever widening pool of debt.
This is when a payday loan claim specialist comes to your rescue. The payday loan refunds executive understands that you have been a victim unwittingly and understands that you want out but are helpless.
The payday loan claims companies will help the borrower claim a refund from the pay loan provider in the following circumstances
- If the borrower increasingly feels indebted causing a struggle to meet his weekly/ monthly household bills.
- The loan lenders automatically debit his bank account, leaving no funds for the borrower’s routine expenses
- It was made available to the borrower when he or she was unwell, without a job or living on benefits.
- It was not affordable as envisaged by the borrower.
- It was rolled over at the suggestion of the lender, resulting in more debt.
- In order to repay, the borrower had to take additional loan or forgo the important payment of utilities such as electricity etc. or even tax.
How do they work?
- The lender puts in his or her application for refund of claims with all the details of the payday loans taken.
- The claims specialists analyze the documents and send them prepared documents for signature towards claims
- The signed documents are presented to the lender who is potentially responsible for misspelling the payday loans
- The lender intimates the payday loan company’s decision and the claims specialist negotiates on the borrower’s behalf for the best outcome
- It settlement is not reachable, the case is referred by the claims specialist to the Financial Ombudsman who will deliver his independent verdict, which will be conveyed and explained to the borrower by the payday loan refunds executive or claim specialist.
A common decision by the Ombudsman is an order for the payday loan lender to refund all interest after the third loan onwards, incase there are many payday loans refunds.