1. Payday loans put consumers in a “debt cycle”
Although the term “debt cycle” is popular among industry commentators, it is not based on facts. Researchers and US state regulators consistently report that 70-80% of customers use payday cash advances between once a month and once a month.
It is important to understand that payday advance payments do not imply long-term loans. Payday loans do help to help millions of families with urgent needs. This means that the payday advance payment is only granted under an agreement that agrees to pay off on the applicant's next payday [thus, the term is a payday advance payment]. Short-term loan providers also provide carry-over services to help prevent payday advance payment applicants from falling into long-term high-interest loans.
2. All are usurers
A payday loan provided by a reputable payday loan or cash advance company does not utilize personnel. It applies only to short-term emergencies of employed persons who need a little help between emergency paydays. This is a very common situation when most households live with paychecks to pay for checks and may not have enough funds to prepare for emergency repairs, travel or medical expenses. In fact, fast payday loans fill the necessary components of the economic world.
3. Rude employees
Payday loan companies do not compete on loan prices, so it is important for them to compete in other aspects of the service to create a competitive advantage. One way is through customer service and ensuring that all employees have financial knowledge and are fully qualified to do the job to prove that their customers receive excellent customer service. This feature can be further enhanced by recording and monitoring phone calls inside and outside the company.
4. Targeting vulnerable groups, the poor, etc.
Payday advances are sold to subprime clients without employment or cultural differences. In fact, payday loans are for people with annual incomes between £10,000 and £25,000. Most payday advance members are under the age of 45. Currently all applicants have stable income and have active checking accounts. In fact, payday advances are for working adults with urgent emergency needs that cannot be met through bank and union loans.
5. High cost and high interest rate
The law requires a payday cash loan to facilitate disclosure of any application fees, interest rates and other fees. According to the OFT guidelines, all fees and rates are required by law to be clearly outlined and disclosed to clients.
Payday loans do have high interest rates. This is not because lenders try to take advantage of emergencies, but because they are short-term lenders. Payday loans are short-term loans, not long-term loans that are continuously refinanced with monthly statements. This means that payday loan companies take on greater risks at the same level of profit as other financial institutions.
6. Threat customers with mandatory collection methods
Short-term loan providers are committed to receiving overdue accounts in a professional, fair and legal manner, without any criminal proceedings. According to BBCA's guidelines, UK companies are not allowed to initiate criminal proceedings against customers for outstanding loans. If absolutely necessary, and after trying all other methods, the lender can hand over the issue to the receiving company.
7. Operate outside the OFT guidelines
All short-term lenders should follow the OFT guidelines and are committed to implementing all practices and collections in the best possible way. The company strives to educate consumers and ensure that our borrowers have a clear understanding of the payday loan process. This is in line with customer selection criteria in the Responsible Lending policy.
A number of posts have been written on the Consumer Forum to explain how payday lenders can withdraw money from those who need it most. It is immoral and immoral. This is not the goal of payday advance payments; these short-term loans are designed to bind consumers to paydays and pay back on time. A loan provider operates a “responsible loan”. The policies outlined in this policy are guidelines that state that the company's fees are transparent and are only available to customers who can repay the loan. If the customer is unable to repay the loan on time, the company also offers a payment plan option; this way, they can repay a small amount of money that the customer can afford each week.
Short-term loan lenders that provide payday advance payments are also considered to work with charities to match customer donations made through the site. For example, a lender has partnered with Starlight Children's Foundation to match a 50 pence donation, and customers can choose to repay interest.
9. Add unauthorized fees to your account
Payday loan providers only charge customers for their arrears and do not want to charge customers more. All company ethics and responsible lending policies ensure that customers only repay the interest and fees associated with their account.
10. Employees have been trained in hooks
Employees of payday loan providers are trained only for business purposes and help customers as much as possible. The employees of short-term loan providers are proud of their outstanding customer service and customer support. Getting a happy customer from this short-term lender's employee means increasing the commission.