Risks Associated With The Same Day Loans
Loans are always risky. No matter what loans you apply for, they make you pay high interest rates. However, there are some loans that have less risk as they are regulated by various laws in the country. The same day loans are not regulated so much. So, there are some risks that are associated with these loans. The lenders or people who are posing as lenders may try to make money from you. There are several instances of gullible people who are seeking loans get cheated by fraudsters. Since these payday loans are available on the internet, it has become much easier for the criminals to try and cheat applicants.
Here are some of the risks that are associated with the same day loans:
- High interest rates: The rate of interest on these loans is very high. Since the money that you require is provided to you within a very short time, the lenders will try to add an additional processing fee to cover their expenses. Also, since the loans are provided to you in spite of the poor credit score, the lender will try to hike the interest rates to reduce the risk that they have in this kind of loan.
- Fraudulent websites: There are a lot of websites that look similar to the website of genuine lenders. The result is that many people think that these are the genuine websites that offer same day loans, and visit them. They also provide the needed information about themselves. Finally, by the time they find that it is not a genuine website, the damage would have been done. The fraudsters who own the websites will use the information for identity theft and for other purposes. This problem can be avoided by verifying if it is a genuine website before entering your personal details on it.
- Processing fee: There are also other fraudsters who have created websites where they advertise that easy same day loans will be provided to clients. Once the potential clients enter the websites and ask for a loan, the website has an automatic reply generated which tells the client that the loan application is approved and that the borrower needs to pay a small one time processing fee. Once the money is paid, there is no more response from the lenders. This is a scam that has caused millions of people to lose their money. This is another risk which can be averted by entering the right website after ascertaining the genuineness of the website.
- Rigid repayment schedules: There are some lenders of same day loans, who may not provide you with the needed information about repayment. Later, they ask you to repay all the money that has been borrowed by you in one go. In such a case, the amount that has to be paid on your next salary day will be much more than expected. It will comprise of the loan amount and also the interest that has been charged on the loan. Since the interest rate itself is very high, the amount that you will end up paying will be very high. Though there are some lenders who will be flexible in the repayment schedule. Most of the lenders are rigid because they feel that any delay in repayment will cause default on the payments by the borrower.
- Financial mess: One of the risks of obtaining the same day loans is that these loans can cause you to get further mired in the financial mess that you are in. You are obtaining these loans to get out of financial crisis, but since the interest rates are very high, the amount that has to be repaid by you will be high as well. So, when you get the next pay, a chunk of the money is gone towards repaying the previous loan. To overcome this shortfall, you may borrow more. This can go on and on causing you to sink further in the financial mess. So, as much as possible, the same day loans should be preferably avoided. This will help you to ensure that you do not sink in financial problems. The best thing to do would be to explore other options of obtaining money when you are in financial crisis. These loans should be obtained by you only when there are no other options available.