If you find yourself in trouble and short of cash, the usual solution to your problem would be to apply for paydayloans through the internet. This is the most convenient, easy, and fastest way to secure cash. The popularity of online paydayloans have risen to a lot of lending companies charging a higher interest rate compared to when they were an offline store. The justification that revolves around the increase in charge is about convenience and speed in applying and processing the loans. This resulted to some companies taking advantage of the situation.
What is responsible lending?
In explaining responsible lending, one must understand that this is not just something indicated or placed on the website but should be merely practiced by all those who uphold it. Responsible lending pertains to the value of caring for the borrower, customer, client, or individual. It may also refer to the company’s commitment to practicing corporate social responsibility which is being manifested through the company’s operations.
If a lending company respects and upholds the value of responsible lending, the following practices must be present:
Regulation of loan
This action links to being a responsible company. One may better understand the action as we compare it to a father or a parent lending money to his/her daughter or son. If the parents are aware of the cash flow problem of their children, they will help their children but they also have to make sure that they teach their children to be responsible by not giving a huge amount. They may just be giving a certain amount that they know can be already of a big help. As the cliché goes, “Give your son a fish and you feed him for a day. Teach your son how to fish and you feed him for a lifetime.” By teaching them how to fish, you teach your kids how to be responsible on their own. You teach them of ways to survive. This is a much better way of helping your kids.
In regulating the loan, lending companies must limit the loanable amount depending on the loan purpose, individual’s capacity to pay, and income. Lending them an amount that is not necessary would not really be helpful. Some lenders think that the higher the amount that they lend, the higher the profit is for them. This means that they think only think of their own selfish interest.
This is why some lending companies only provide a lower maximum amount of paydayloans to new customers because they still have to prove a good payment record before they can adjust it to a higher amount in their succeeding or future loan application.
A monthly limit
Since payment time is usually set on the next pay day of the borrower, it would be better to adapt the rule of limiting the borrower to extend the loan because you can only add or roll-over your loans only up to a month. The reason for this is to help a borrower not be pushed down and be covered with debts. At some point, the borrowing has got to be stopped otherwise it would lead to an addiction. Some lenders are okay with this because the interest rates and penalty fees add up which translates a better business for them in terms of increased revenue. They really don’t care about their clients swimming in debts for as long as their business grows because of you. This is reality.
Encouraging customers to pay on time or earlier – Creating programs that will entice borrowers to pay on time is also helping them get out of debts. Another benefit that the borrower gets from this is that their minds are exercised on how to come up with payment or another source of income. The lenders may also be teaching the borrower basic management of finances silently by making them pay on time or encouraging them to settle the loan ahead of the due date. Aside from this, if the company has a partner or tie-up with a credit bureau then they can also improve your credit score or rating.
Providing all possible of communication channels
Responsible lending also entails that you provide the right and correct information promptly. This means that all communication tools must be in place and that all channels must be used and maximized. For instance, social media networking sites are both communication tools and channels that lenders may use in providing better pay day loans for their customers. They can use the Facebook, Twitter, LinkedIn and many more for updates and announcements.
Responsible lending is all about providing service to the people and at the same time teaching them the ways of being responsible too. Do not be like the other lending companies who are only in business to take advantage of the poor and the young. Responsible lenders are those who grow their business by growing with their customers.
There are a variety of pay day loan facilities from which one can borrow. The question is which one is reliable and offers the best service? The increasing demand of borrowers for quick cash has instantly created several loan agencies or pay day loan companies. When you type the word pay day loan in the search box engine, you will be amazed at how many returns your hit will result to. There maybe thousands or even millions in the list. Normally, we tend to click on the first site that our eyes catch.
With the various payday loan agency or company that offers easy and convenient online application and processing, everyone is tempted to borrow. Is there a way of finding out which one is the best? How do we know that what we selected would really serve our needs? Is it a secure website? These are the things that we should ask ourselves when we choose from the thousands of pay day loan agency flooding the net. Here is a quick guide for borrowers. This article will share some basic information on the things that one should consider when choosing the right pay day loan lending company.
Tips on choosing the right online lending company
Is the lending company upfront or honest – When we say honest or upfront, we are talking about the calculation of your total loan amount to be settled. Can you easily find in the website all the fees and rates that will be applied to your loan? This is one way of being upfront to their customers. Are there any pay day loan calculators, sliders, or any tool that is being featured in the website to inform you of the cost? A good lending company would be able to inform you of the interest rate and the total cost that corresponds to the specific loan amount you would like to borrow.
Web Design – Is the website simple and easy to understand? Yes, it is rather interesting to see colourful and flashy websites but does it contain all the information that you need? Some pay day loan sites may provide a very complete and informative content but the way it was designed is not that clear and organized at all. One way to find out is by simply looking at the site. Your initial glance will already tell you if it is complete, organized, and informative. You will already know all the things that you need to learn even just with one glance.
Look for the VeriSign logo – If the website bears and displays the VeriSign logo, you can be assured that all the information that you provide remains private and secure. This is usually some of the concerns of the people using the online facility. There are many hackers and phishers who can derive all your information if the pay day loan website is not secure. This is why you should be on the look-out for this logo on whatever site you provide your information with.
Search for a Forum – Some online lending company have managed to establish forum tabs on their website. This will give online borrowers a venue to air their complaints and get some ideas from the other people participating in the forum. This is also a good channel for bringing out some information that can’t be provided for in the chat support or phone customer support. This is actually an easy access to get or inquire for some help regarding your loan. The good thing about this is that there is an unbiased opinion because the ideas and answers come from third-party individuals.
Rewards program – Are there any rewards program being offered by the lending company? Why should this be part of the good points of a pay day loan company? Rewards program are usually earned by borrowers for referring some friends or clients to their company. Some offer rewards by giving points, others go by percentage. There are also other lending companies that offer a corresponding money reward which will be deducted from the customer’s outstanding balance. The rewards program is actually both beneficial to the customer and to the lending company. What happens here is that the rewards earned will help the customer in reducing their debt while it would mean more customers for the lending company. Therefore this is a two-way thing.
The tips mentioned above are not the usual suggestions or advices that you would get from any financial article. These items are usually or often overlooked and ignored but it makes a lot of sense in helping you out in choosing the right lending company. There are already many literatures about the common things that one should look for so here is looking at the other side of it. Remember these things and you will surely be able to find the right lending company for you.