Nov 16, 2013 Sean Albert
There has been a lot of criticism levied against the short term lending industry as of late. Although some government officials and other groups have suggested the sector isn't conducive to good consumer credit and other financial measures, that simply is not the case.
The fact of the matter is, as in every other industry, some bad apples ruin the reputation of the sector for the rest of those involved. Moreover, there are also consumers who take out loans with certain expectations, and it turns out that they were misinformed. In order to ensure the vitality of the sector for years to come, borrowers and lenders alike have to work together and be as knowledgeable as possible.
This can start with the lender - administrators at these companies should always train employees to make certain that clients know all the terms of the alternative credit arrangement and have the right data in order to make an informed decision. According to The Paramus Post, as long as individuals know what they're signing on for, short term loans can be an invaluable financial tool when emergencies crop up.
The news source explained that they are not overly complicated loans, and applying is exceedingly easy, which should come as a relief to downtrodden consumers. After all, signing up for a bank or other traditional loan can take a lot of time and require extensive and intrusive information. Meanwhile, small dollar lenders are a bit more time-conscious and even usually guarantee that the borrower will receive the sum in just days.
Moreover, consumers should be made aware that because of current financial standards, many of the high interest rates - namely, the annual percentage rate - advertised are often misleading. For instance, short term loans are only meant to be taken out for a few weeks' time, so going by an annual figure isn't accurate - the actual fee will be a fraction of that metric.