The problem with people who are not financial literate is that lenders may charge them very high rates on the loans. How do lenders know whether the individual has knowledge about payday loans? It’s quite easy actually. When you talk to your lender before accepting the loan the lenders who have quite good experience in this field can know easily how much knowledge their clients have on payday loan laws, interest rates etc. If they sense the person applying for a loan does not have much knowledge, they offer them higher than normal rates. Poor customer accepts it without verifying the facts. Lender benefits.
Now partially the customer is to be blamed too. Why should you buy a product without doing proper research about it? Do you ever buy a costly electronic item or something very costly without doing any research? No!
We all do some research before we plan to buy a costly product. Then why do we buy payday loans and other financial products without doing proper research on them?
What we can conclude is that it’s boring to study about financial products. It’s even boring to read about payday loan laws. People just want cash and want to know how much they need to pay back – that’s it. They don’t want to know the nitty-gritty of the payday loan laws. Lenders know this and some lenders charge extra when they come across an applicant with little knowledge of payday loan interest rates.
However not all lenders do this. Some just play by the rule. Interestingly they are the ones who remain for long in business. Lenders who charge rates above lending laws eventually get caught and their business is finished.
The point of this post is simple – we all should read about payday loan and understand how they work, know the payday lending laws of our state and what happens if we fail to payback.
That way we will be safe and loan sharks may not be able to use our innocence to their benefit.
Thank you for visiting our website. Hope we helped you get a loan.