Jan 07, 2014 Quinn Thomas
The market for short term loan products has been growing in the United States in recent years. More Americans are starting to use these financial services for a variety of reasons. In particular, they offer an incredible level of convenience that makes applying for advance loans fast and easy.
In fact, many short term lenders are introducing online portals that allow consumers to access funds from the comfort of their own home. According to BestPaydayLoanOnline24.com, the company has revamped its online system to include a new algorithm to deliver better and faster results to consumers. In just one hour, visitors can be approved for a loan via the Internet, an example of how useful advance services are becoming.
However, businesses that introduce these models need to understand that the industry is being targeted by regulators across the country. From federal officials at the Consumer Financial Protection Bureau (CFPB) to elected representatives in a number of states, regulators have short term lenders in their cross hairs, despite the accessible capital these loan providers offer to Americans.
Due to the various cases that have been brought against the few short term lenders that have allegedly broken laws in recent months, some Americans have a negative view of the industry. Although it is a largely misguided perception of the sector, it's important for lenders to note so they can address the situation in a positive manner and better their reputation.
As KLAS-TV reported, one of the reasons consumers run into issues with advance loans is because they are not aware of how they work or what rates are associated with these products. Borrowers who are unable to comprehend the terms of a short term loan are obviously more likely to have trouble staying current on payments.
To combat this issue, advance lenders should ensure that all customers have a close understanding of what services they are using. Before any borrower signs a loan agreement, lending professionals should go over the contract line by line to help their customers learn about how short term products work. By doing so, they may be able to reduce the number of late loan payments and enhance their reputation among consumers.
With so many regulators breathing down the neck of the short term industry, lenders needs to do everything they can to augment their services. Promoting financial education is a simple way to show officials the sector is looking out for consumers.