Warnings for predatory offshore online payday loan lenders are in the news. What differentiates these qualified payday lenders from those found within the countries’ borders? What makes their predatory lending style different from those who do it from within the borders? Knowing the answers to these questions will hopefully keep borrowers from falling into their money traps.
What are the dangers of offshore online payday loan lenders?
The state regulations for interest rates only apply to those lenders within the borders. This will leave an offshore company to charge the fees over and above regulated lenders. There are offshore lenders who actually charge up to 2000%!
The offshore lenders will disguise themselves as online payday loan lenders in a typical web format which would not have anyone questioning their place of origin. This practice ends up attracting a wide variety of new customers.
Some of these offshore lenders have practiced fraudulent behavior by withdrawing money out of a customer’s bank account without prior permission or authorization.
If a consumer wants to press charges, the fact that they are located out of the country will make this process virtually a dead-end challenge.
Collections practices are not regulated. Harassing and abusive collection techniques are used to collect on loans gone bad. Prosecuting this behavior is nearly impossible.
Why are consumers applying for loans from those companies?
These companies design their websites to look similar to other regular lenders.
Consumers may have too many other payday loans out to qualify for American companies.
There may be a need for a higher loan amount than what state regulations allow.
The interest rates and fees are not fully disclosed to warn customers of high payoff costs.
Getting into one of these loans for a higher amount are making these customers fall deeply into debt. With interest rates up to 2000% and non-regulated fees attached to high dollar loans, the chances for rollovers and re-loaning are strikingly increased. Getting caught into a cycle of debt is exactly what reports on predatory lending have been warning consumers about.
Online payday loan lenders are expected to follow all state rules and regulations. You can shop among American companies, the online and store locations, to find the lowest interest and fees to fit your financial needs. Make a list of important questions you want to know about the company you do business with. Give them a call and find the answers. If a customer representative is not answering your question or skirting the issue, a flag is waving to get your attention. Companies who are promising money in minutes, especially amounts greater than what other’s offer, there are more flags trying to get your attention. A predatory lending company will put pressure on the borrower to sign quickly. A borrower will make the best decisions when time is taken to look into the lender’s practices and understand how the loan process works.
Spotya! online payday loan company want customers to realize that they do have a choice. These short-term loans are not the answer for every financial problem nor should any customer ever be pressured into obtaining one. Look for a company who will answer your questions and most importantly follow state regulations
I am a Blogger, Web Content Writer, Teacher, Mom. A woman of many hats. As an elementary teacher, I had always encouraged my students to write more. I find myself falling back on my own teaching techniques to share what I know about building and rebuilding personal finances.