But not to worry anymore! Win this blog, we are going to clear it all up and bust the myth.
They Always Target a Financially-Struggling Niche
No, that is not always the case! Typically, payday advances are targeted to subprime clients devoid of any distinction in culture or employment. It is a common norm that payday loans are marketed towards customers earning between a £10,000 and £25,000 per annum bracket. Moreover, they are targeted to people under the age of 45, enjoy a steady income, have an active account, and are currently employed. In simpler words, the niche includes all those working adults who may be faced with an immediate need for additional money that conventional banks and other union lenders don’t offer.
Payday Loan Lenders take Advantage
People who have never applied for a payday loan in their lives live with the pre-conceived notion that payday loan lenders take advantage of people, which isn’t true. When working with a reputed payday loan firm or lender, they do everything but take advantage of their customers. Payday loans offer short-term help and are mostly sought by employed men and women who need a little bit of help in times of financial crunch. It is difficult for families living pay check to pay check to stay financially prepared for any emergencies; payday loan lenders understand that!
The Total Cost of a Payday Loan is Never Disclosed
According to the rules and regulations laid by the Financial Ombudsmen Service, it is every payday loan lender company’s primary job to disclose every little detail about the application, interest and other additional fees involved, minimising the risks of any fraudulent loans. This isn’t only a customary requirement, but a legal one. Therefore, all companies abide by them to stay a registered member with the authority.
As for the interest rates, all payday loan companies charge higher interest rates. It isn’t because they wish to take advantage of the person who is in need of a quick cash fix, but because payday loans are short-term loans. They are meant to be repaid in a short amount of time, mostly in a two-week time frame. Therefore, unlike long-term loans, the money needs to be refinanced on a monthly basis. This leaves payday companies with a greater risk as compared to other financial institutions that offer long-term loans at lower interest rates.
Employees aren’t Courteous
Since payday loan lending companies have no legal right to compete on the basis of the prices of the loan, they look for other competitive means to do so. Customer services are one aspect that allows payday loan businesses to standout from the crowd and make their mark. Therefore, being discourteous isn’t in the equation for them. If anything, they need to be knowledgeable and corporative with all their customers to ensure they remain loyal and don’t wander off. If there still remains a doubt, know that all the calls between employees and customers are recorded and monitored for any discrepancies, further minimising the chances of any misbehaviour or harassment.
Standard Guidelines aren’t Followed
No payday loan lender firm, be it small or large, will survive if it doesn’t comply with the guidelines set by the Financial Ombudsmen Service. The requisite guidelines set by this authority are dedicated to ensure all processes from the first application till the repayment of that loan go smoothly. All payday loan companies are advised to educate the customers about the total costs of the loan and keep no details hidden. If they do so, customers can place a claim for a refund or compensation with the Financial Ombudsmen Services and sue the company.
Unethical Practices are a Common Norm
Again, when it comes to ethics and morals, the core objective of payday loans is to help those in need by providing a little financial uplifting. All payday lending firms are registered with the Financial Ombudsmen Service and practice transparency in their services. There is no room for unethical practices, hidden charges or inappropriate behaviour on the employees’ part, making the payday loan lending industry an ethically apt one in the UK. Payday advances are only lent to those who can pay them back in the promised time frame. However, if the borrower is unable to repay for some reason, there are many repayment plans and options available to ensure that the borrower doesn’t have to worry about increasing his/her debt.
Payday Loan Employees are Smart in Setting Hooks
Employees at payday loan lending firms are solely trained for business purposes. Though their jobs are commission-based, that doesn’t mean they will only try to trap you in applying for a payday loan without letting you go through all the processes involved. Satisfactory customer services are what they pride themselves in and if they were that pushy, the payday loan industry in the UK wouldn’t have flourished the way it did in the last 5 years.
Harassment Issues are Fairly Common
Professionalism is the key to success, and payday loan collectors know that. Harassment is rarely a case as the Financial Ombudsmen Services instruct payday loan companies to restrict all loan-related texts and calls after 8:00 p.m. Furthermore, no criminal action against those who are unable to pay back in the given time frame is allowed either. So, claims of harassment are purely fictitious.