The need for availing payday loans is most felt in cases of financial emergencies. These loans are perfect for those individuals who have a low credit rating and are dependent on their monthly paychecks to make ends meet. It becomes extremely difficult for such people to arrange for funds in case of a medical or any other emergency which just cannot be avoided. Online payday loans are their only hope and option.
Dangers Of Online Payday Loans
In spite of the many advantages, there are certain risks and dangers involved in using these online payday loans. One needs to be aware of dangers before applying for one.
Loss Of Job – The repayment of the payday loans is totally dependent on the salary, which comes in the hands of the applicant every month. Incase due to some unforeseen circumstances, the applicant loses his job, then repayment of this loan can become very difficult. Defaults in payment will result in addition of various fees, percentage rates and other such charges to the principal loan amount resulting in even a bigger debt on your head with every passing day. These miscellaneous charges are a big income source for the lending companies.
Hidden Fees – Another major danger associated with payday loans is the presence of various hidden charges. This risk is present in all types of loans and the only precaution against them is to be fully aware of the costs and charges being asked for in the loan agreement. These hidden charges may appear like a ghost on the day of the final payment of the loan and you and your paycheck may not be prepared to cover these additional charges resulting in default on loan payment which again result in additional charges mentioned above to be levied on you thus increasing the total loan burden.
Identity theft – A big risk involved in applying for an online payday loan is the chance of your personal information getting leaked over the internet. It is, therefore, essential that before filling out any personal details, one ensures that the company that they are dealing with has the approval of the necessary authorities and it should be backed by some national institution. If the necessary precautions are not taking the risks can be very high including all the funds in your bank account getting transferred out without your knowledge. Now that is one scary thought.
Clerical Errors – This risk or danger is present in case of all banks and financial deals, where due to some clerical or unintentional mistake of some staff of the bank or lending company, your account either gets credited or debited with an amount which you have no clue about. In case of a debit, it is easy to claim it from the bank, but if the amount is credited to your account, one can get into some really dirty mess which will require a lot of explaining to be done on your part.
Reputable Lender Company
When the need for these payday loans arises, it becomes impossible to think of the above risks, and one stands ready to bear all the consequences of the same. Avoiding taking these loans is not a solution. What one can do, in fact, is to ensure that the lending company that they are dealing with is a good and genuine company with an impeccable track record. If the lending company does its job with complete sincerity and honesty, then almost of the risks described above go away. Hence, finding the right company to borrow the online payday loan from becomes the most crucial part in the process of availing this loan.
