Read Our Mr Lender Review In Order To Find Out Why They're A Worthwhile Lender
The payday lending establishment is one area of business doing well during the recent economic recession
. For those who simply can't wait for the normal loan process to complete, a payday lender can admirably serve those who need money fast. Reading this Mr Lender review illustrates the consumer advantages and pitfalls inherent with this kind of lending. One of the biggest advantages for the consumer, however, is ease of access and reduced loan approval time.
These loans can often be processed within 24 hours. Applications can be made over the phone, the Internet, or in person at a local office. They require no standard credit check, and funds may be deposited within a day. Most of the time there are no up-front loan fees, and the process is discreet and private.
When viewed in this light the pay day loan can certainly fill the need for quick cash, especially when a customer does not want to involve credit cards. As a source of fast money, these small loans are short term only, and charge high interest rates. Because they are designed for the person who has no other financial recourse, and needs the immediate cash boost to pay for an unexpected expense such as medical bills, car repairs, or similar emergencies that simply can't wait, they can help maintain personal mental tranquility while they getting rid of the immediate stress of unpaid bills.
As many have already pointed out, a big drawback is the high rate of interest charged on these short-term loans. As per industry standards, Mr Lender extends 25% interest on the amount borrowed initially, in addition to a smaller standard fee for administration. This covers transactions, and the amount stays the same regardless of the period of time involved. Mr Lender openly states that some credit transactions can take up to 72 hours for approval, even though most are completed much faster.
In order to properly extend credit there has to be a modicum of trust between an institution and its customer. Those who have never secured this kind of loan can't simply demand a certain amount. There are guidelines for new borrowers, and repeat customers can have their loans increased based on payback records. Unemployment usually disqualifies a borrower. Other requirements are UK residency, a valid bank debit card, and a borrower must be at least 18 years of age. If these factors can be easily verified, most people can get their cash within a day.
The downside of payday loans is not specific to Mr Lender. Any institution extending this kind of credit is subject to the charge of exploitation of those who are in the worst financial shape, and who simply can't afford the high interest rates. The argument is made that many people simply can't pay the money back before the highest interest kicks in. These kinds of loans can be renewed, which in the business is called "rollover". This cycle is the gateway to excessively high interest for the borrower.
For example, someone who accepts such a loan for two weeks or until next payday, and pays the required fees, might think his financial difficulties have ended. But, the actual interest rate is between 300-400%, and if the loan can't be paid back on time it can be extended, thus guaranteeing an even higher interest charge. It is easy to see where this can head, and rather than financial relief, in this case the payday loan may only contribute to the burden.
Does all this mean that payday loans are inherently bad or unwise? No, but it does point out that borrowers need to enter such an agreement with their eyes open, and with the intent to pay the money back in a timely fashion. The benefits of these loans have been illustrated in this Mr Lender review, and they can be of enormous assistance during a difficult financial time. A fully informed customer will be less likely to default, especially with the possible financial consequences.
by: Brian B Smith
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Read Our Mr Lender Review In Order To Find Out Why They're A Worthwhile Lender