Payday Loan Lending

Payday loan lending has been around for years making it possible for consumers to have access to fast cash without worrying about credit worthiness or approval waiting times. Financial emergencies often times require money in a hurry and most "traditional" lenders, such as banks and credit unions, don't offer the timeliness that is equally matched to payday lenders. With these types of short-term loans, consumers are expected to pay back what they borrow within a small-time frame; usually with their next paycheck. Lenders use their own collectors to deal with defaulted payments but identity thieves have found their own way to try and collect on these loans, and unfortunately many consumers are falling for this!

Payday loan lenders, also know as providers of "small dollar loans", withdraw loan payments from the borrower's bank account on or around the same day that the borrower's paycheck goes in their bank account. In the event that the money is not available for repayment, the lender will most likely be willing to make payment arrangement's with the borrow in an effort to see them repay their loan successfully. If that doesn't work, then a collector will get involved. It will most likely be someone from the payday loan lending company, or perhaps a third-party collector. Lenders will never get the police involved nor will the seek out the FBI to regain their lost funds.

A recent fraudulent act has identity thieves posing as FBI agents trying to scare consumers into paying off payday loan debt that they may not even owe. Using ID spoofing technology, consumers answer their phones seeing "Federal Investigations" on their caller ID. The impersonator on the other end of the line then claims they are an FBI agent who has been monitoring the call recipient's online activity as a payday loan borrower. While the unsuspecting victim on the telephone may or may not have a payday loan account, the thief posing as an FBI agent will threaten legal action, and even jail, if not paid by wire-transfer or pre-paid debit card. These thieves may even have access to a person's address, place of work, or social security number.

Consumers need to know that regardless of any loans held, these so-called FBI agents are phonies and have no power to collect any type of money whatsoever. In the event that you do receive a phone from someone claiming they are an FBI agent and that they are looking for a payday loan payoff, here are a few things to keep in mind:

*Any money exchanged via wire transfer or prepaid debt card cannot be reversed or tracked. It's like sending cash,which is why the person calling will request that you send funds that way. Once you pay them, you will have no chance of getting your money back.

*If you are in fact solicited by one of these impersonators, hang up and don't call them back. While you may feel you want to "set them straight" it's not worth getting into a confrontation and risking giving them information that they can use against you later.

*Be sure to report the incident to your local police department; especially if you feel threatened.

*While you may have have caller ID and it is correct most of the time in identifying your callers, don't believe it if it says "FBI". Caller ID spoofing has made it possible for perpetrators to pretend they are anything from representatives from your utility company to immigration authorities.

*If you do decide to speak with the caller, ask then to provide an official "validation" of the debt. The law requires that they do this and include the name of the creditor, the amount of the debt, and a statement of your rights under the Fair Debt Collection Practices Act. If the "collector" is not willing to provide you with the information you are requesting, then hang up. This is a sure sign that they are not legitimate.

Emergency Payday Loan

What Are Payday Loans?

Payday loans, sometimes referred to as payday advances, are short-term, unsecured loans, usually for small amounts. The only collateral that is generally required to apply for these specific loans is some form of employment records, like pay stubs, although the term payday loans has become a shorthand for any type of small, short-term loan even if it's not technically backed by a direct reliance on a borrower's next paycheck. Payday advances, like any loan vehicle, are regulated heavily. These regulations vary widely from state to state in the United States, and from country to country internationally.

Payday Loans Are A Booming Business

Payday lenders have had seen booming success worldwide, and credit that success to offering a service that was not formerly available. They point out that emergency cash loans offer an attractive alternative to people who are not able or willing to use less expensive conventional routes to borrow money. Some companies that offer emergency cash advances in the UK have described their approach as a handy financial service for young, Web-savvy borrowers, accustomed to the ease and convenience of instantaneous online communication. These applicants often feel left out of the conventional banking system. Today's modern consumer, raised entirely with social media, can even apply for these micro-loans using their smartphones, with money transferred to successful applicant's bank accounts within minutes.

 Compare Payday Loans With Other Loan Types

Many types of short-term loans can seem expensive when the fees associated with the loan are factored as yearly APR. For that reason, payday lenders prefer to compare their loan products to bank overdraft fees and other charges that traditional lenders use to recoup funds. Many payday lenders don't even characterize their business as banks, simply as another form of Internet technology, used to connect willing borrowers with willing lenders.

Payday Loans Are Available 24/7

As traditional outlets for loans become harder to find and are requiring larger and larger amounts of paperwork for even small loans, payday advances have stepped in to fill the vacuum. They're available day and night, seven days a week, and in many cases the process is so fully automated that loans are granted without the borrower ever having to speak to another person. After applicants have established a track record of successfully paying off cash advance loans, some lenders only require applicants to text the amount of the desired loan, and the term of the loan desired, and the money is instantly made available.

 So Why Would I Pay the Added Interest?

Sometimes it's an unexpected emergency, or it may be that an opportunity has come up you couldn't possibly pass up. Is it tickets to the playoff? Has a friend obtained access to ringside seats at the "fight of the century"? Or maybe you have committed an unforgivable sin and forgotten your significant others birthday...

Whatever the reason, you're short on cash. If you haven't got credit cards and maybe your friends and family are not in a position to help out. What do you do?

It's increasingly common for those in immediate financial need to approach a short-term lending company for a "payday loan". These loans are often unsecured, meaning the borrower has no collateral to provide. This makes the loans a high-risk cash advance for the lending company. If the borrower bails, there's nothing of value to collect. They compensate for the increased risk by charging very high-interest rates.

The applicant usually must provide proof of employment, and government issued identification. The idea is that when the applicant's next pay check is issued, the funds will be used to pay off the loan. In some cases, the loans may be made for the borrower to purchase a car or other big-ticket item. In these cases, there is somewhat less risk involved for the lender. The item may be re-possessed should the applicant fail to repay the loan as promised.

  

So What is the Bottom Line

Companies around the world offer payday loan services including Canada, the United States, Australia and Great Britain. The rules and regulations regarding how much interest may be charged, and limits on the amounts of the loans vary depending on the country, state, province or county where the payday loan company is located.

The industry is growing; possibly the fastest in the UK, where there are fewer regulations on how payday loan companies may operate. UK firms have expanded into Canada and Australia. In a few states in the United States, super high-interest loans (such as those provided by payday loan advance firms) are illegal.

On the spot check-cashing is another service that is frequently offered by payday advance companies. Perhaps the customer does not have a bank account or wants immediate access to the cash. A flat charge or percentage of the check amount will be charged as a fee. Short term loan companies often open early and close late to take advantage of those who need immediate access to cash.