People looking for a fast payroll loan may be confused with pension advances, the latest in what some people are labeling as payday loan look-alike. These new loans are also referred to pension sales or pension buyouts and the elderly population are falling for the option to access money from their retirement fund. These loans have nothing to do with the payday loan industry yet their terms and conditions may put them in the same high priced short-term loan bracket.
The high rate fees put investors at risk of losing a tremendous amount of money. There are stories of the borrowers taking out life insurance policies with the lenders name as beneficiaries. This practice is a requirement for some of the lenders in order to obtain money. The interest rates range from 27%-106%.
Best payroll loan companies would not loan to the military. There are set laws to protect military from falling into debt. Short-term loans are not a feasible answer to those in the military. Responsible lenders would avoid every application from military applicants of any level.
Pension advance companies feel that since their loans are not payday loans and instruct those in the military to set up a different account to make payments out of that there should be no problem lending against their government pension. There have already been judges to rule against the argument and the borrowers no longer have to repay the loan.
Payroll loan advances provide quick cash upon approval.
Once an application has been approved, the payroll loan advance companies deposits money straight into the borrower’s bank account. Pension advances get a lump sum payment and will have to give up all or a good portion of their monthly pension checks over a contracted period time. For those companies that make the borrowers take out a life insurance policy, they will have the assurance that no matter what, their elderly client will repay the loan, and then some.
To group the pension advances in with short-term loans is only adding more negative news to the payday industry. Most direct lenders do not target customers nor do they have poor practices requesting outrageous demands. The court system has already caught on to the unlawful practices and has begun turning the tides in the borrower’s direction.
Will this be the only unlawful attempt to attain money from vulnerable people? The elderly population is targeted too often by those looking to make easy money off their bad luck or lack of understanding. Even the short-term loan companies with poor practices do not share similar practices.
Financial problems do create vulnerabilities. Customers in these happenstances, who fall into a sales pitch out of their eagerness to resolve financial problems effortlessly find themselves in a bigger financial ditch.
If you have never used short-term loans or are confused by the information presented, get a friend or family member to help you understand. Research payroll loan companies online and compare services; the last thing you want is to settle for a service which does not support your personal financial situation.