Many times I've wondered exactly what the difference was between a regular loan one would get at a bank or lending institution and those payday loans you sometimes see advertised in the local penny saver papers. The name does sound pretty self-explanatory, but is it really?
If you are going to apply for a payday loan, do they look at your credit rating? If so, how does that affect you ability to actually receive the money successfully? Or perhaps the rates one would have to pay are based upon ones credit rating.
And how do they actually verify that you have a job which will eventually result in a payday? I know one advertisement I noticed recently indicated that all you had to do was bring in your most recent pay stub and verification would be satisfied.
But what if your most recent check was also your last payday? Would they know this? If so, how? The only way I can think of is they must be calling your human resources office and asking them point blank whether or not you still work there. Many businesses won't give out this information, however.
With all these questions, I can only imagine how hard it is for banks to process the real loans they are handing money out for.
Monday, June 22, 2009
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8 comments:
I've often wondered the same thing. I'm not sure how they work but I'd sure like to check with Tom Martino or other consumer advocate to make sure that I get a good place and not the equivalent of a loan shark.
That's an interesting question. Never having had one, I'd like to know, too. Maybe the fees are high enough to cover any eventualities. But I might need one so I'd like to find out, too.
Well, I think that a payday loan is so short that you pay a flat fee and repay it right at the next paycheck. They must have some sort of recourse in case you don't pay. A personal loan is amortized over several months like any other loan.
Ooh, don't look in the Penny Saver. That's practically the equivalent of Craigslist and not to be trusted. Try to look for a more legitimate source for a pay day loan.
How about going to the newly expanded gaming in Black Hawk and Central City? Ha Ha. Maybe you'll earn some good money that way.
Has anyone heard anything from any consumer advocates about these loans? I mean the payday loans. What are some of the things you should watch out for?
Personal loans are much harder to qualify for. I think you don't put up any collateral, so they are very stingy about whom to give one to. A payday loan uses your paycheck as collateral.
I think the fees are very high on payday loans--not sure about that, though. For a personal loan, the interest rate, I think, is higher than on a home equity line of credit. Maybe not as high as a credit card, though
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