Now You Can Avoid Short Term Loan Abuse
Short term lenders have come under some scrutiny lately by consumers and advocacy groups alike. There have been complaints about high interest rates and aggressive collection methods.
Online, September 2, 2013 (Newswire.com) - The vast majority of lenders who supply short term loans conduct business in a fair and ethical manner. As with anything, a few bad actors spoil it for everyone.
There have been lots of negative news stories about short term loans and some state governments have passed laws that have limited the issuing of short term loans or banned them outright. Some big banks have even gotten into the act by limiting the amount of overdraft fees that result from automatic withdrawals from short term lenders.
Of course, short term lenders are in direct competition with the big banks so it isn't surprising that they would take sides against alternative lenders. There are ways that can protect borrowers from becoming stuck in a cycle of endless short term loans.
By following these four tips customers can keep four finances in order.
1. Negotiate With Lenders
Sometimes creditors get a bad reputation of being inflexible and uncaring about their clients. But in reality they have become more receptive to working with delinquent borrowers. They realize that by helping out by granting an extension or waiving late fees it not only makes you happy but also increases the chance that customer will repay his loan in full. It's just good business. Do not be afraid to ask for help. May be surprised at what can get.
2. Shop for the Lowest Rate
Take a bit of time and search for the cheapest rates can be found. There are many credit unions and small local banks who offer unsecured loans to their customers. Just find them. A quick Internet search could reveal a number of lenders in local area.
3. Get Help from a Credit Expert
Credit counselors can help get finances in order by helping design a realistic budget and even negotiating with credit card providers and lenders. These are non-profit groups whose sole purpose is to help consumers manage their debt. Check with the National Foundation for Credit Counseling to find a reputable company in the nearest area.
4. There Is Special Protection for Military Members
Members of the military and their families receive and extra layer of protection from short term lenders. The can be charged no more than 36% interest on their short term loans. That includes any fees or other charges. Short term lenders cannot request post-dated check or any bank account information from members of the military or their families. These rules can make a huge difference in the overall cost of a short term loan.
Short term loans have their place in the lending world. There may be times that a short term loan is the best option. It could be the only option. But by seeking out alternatives save some money and avoid the endless cycle of short term loans and escalating debt.