What About Those New Payday Loans Lenders That Accept All Applications?
With the rapidly growing competition in the market, many new payday loans lenders have recently joined the industry and the special thing that gives them an edge over their competitors is that they are accepting all applications as long as the applicant has a bank account in their name. This is a new change in the payday lending industry because lenders earlier use to offer cash advances to salaried individuals only. But, these new lenders do not care much about the employment factor. In fact, they offer several other lucrative features also that make them the first choice for prospective borrowers. For example, they do not even verify the details provided by applicants. They have termed the loans they offer as “no-verification” payday loans. But, a question might arise in your head that why they are taking so much risk. They are obviously not into the charity business. So, what’s the catch? Following is a brief overview on it.
The Legal Status Of Such Lenders
The laws in all those states where payday lending is legal do not have anything against such new payday loans lenders. It means even if their offer seems too good to be true, they might not necessarily be scams. Many of them are licensed lenders and they have their payday loan stores running in many states. They also have a very high visibility in the online market.
Why Are They Taking So Much Risk?
This is obviously the biggest question. In order to answer this question, you will first have to understand the exact provisions for those new payday loans, especially regarding the repayment. You can find these details quite easily by going through the information provided on their websites or by talking to their representative on phone. Like the majority of other payday lenders, they also require you to authorize them for direct debit from your bank account. Their application forms contain all those provisions. When you sign and submit the same, it means you automatically give them the rights for direct withdrawal of funds from your bank account.
Now, those who are scam artists among these lenders, especially the ones who run their business through Internet with no physical address, never transfer the amount of the approve loan to your
account; instead, they simply withdraw money from your account and vanish from the scene.
But yes, as said earlier, there are legitimate ones also among those new payday loans lenders. The legitimate lenders claim that they do not verify the details provided by you. But, in reality, they do verify at least one thing – your address. This is very easy and quick to do if a legitimate lender has your bank account details. They transfer the amount of the loan approved to your bank account. But, if they fail to collect the repayment amount on the set due date (such as because of insufficient fund), they send their collection agents to your address who harass you and build pressure on you to make payments. Now, this is something illegal, but this is what really happens. Though the laws have provided you legal rights, it is practically not very easy to deal with such harassing collection agents. If you try to use your legal rights and file a lawsuit against them, you will have to spend a lot of time and money, but for them, it is daily business. So, you can say that they are trying to use their practical fact to their advantage.
In short, these new payday loans lenders are offering lucrative loan offers just to attract more customers otherwise they are very much the same.
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