Payday Loans

Reasons Why You Must Avoid Online Payday Loan Companies

Online payday loan companies often make very attractive offers for easy cash advances, but it is very important for you to understand that borrowing from them can be a very risky venture. There are plenty of things that you need to keep in mind in this regard. First of all, you must note that the laws applicable in your state apply to them also regardless of whether they are operating their business from Internet or have their offices located in a different state. As long as they are lending money to you, they must abide by the payday loan laws enacted by your state. But, despite this very fact, such companies when are found to be unscrupulous ones are very difficulty to catch by law. Therefore, you have to be very, very careful while you are dealing with them. Following are the some of the major risk factors associated with them that you must be well aware of.

Hidden Charges

Like the majority of other payday lenders, online payday loan companies also charge an extremely high rate of interest, but that is not all. Most of their cash advance programs often include an array of hidden finance charges, which can turn out to be a very substantial amount of money. You can imagine the horror of the situation with a simple example that a $200 of loan that you borrow for a period of 14 days can require you to pay back $300 or even more.

Unfair Collection Practices

Things turn out to be more horrible when you miss the due date and fail to make the repayment in a timely manner. The majority of online payday loan companies are indulged in unfair collection activities. For example, they may send the same check again and again for collections, which may result in multiple NSF (non-sufficient fund) fee charged on your bank account. Non-payment on the set due date gives an opportunity for these companies to place hefty amount of charges under different tags, such as late fee, due date extension fee, collection charges, NSF fee, and an array of other such things. Besides that, you also have to pay interest for the extended period of time. Every single day of delay in repayment adds a substantial amount of money to your overall outstanding debt balance. If you are late by one month, you are into deep, deep trouble.

Therefore, if you are considering borrowing from online payday loan companies, you have to be very careful.

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