Wednesday, 20 Feb 2019

How Vital Transparency is to PayDay Loan Customers

The payday loan industry has a bad reputation from mismanagement and a poor duty of care towards consumers that stretches back a few years. In the last few years however there has been a change on two fronts. Firstly there was changes at regulatory level, with the tightening of rules and a growth of restrictions on who short-term credit can be given to, and how the entire process functions. The other chance came with the creation of a spate of new payday loan companies that wanted to do things a little differently than their predecessors. These days you can find a responsible lender, willing to help you out of a short-term financial hole, but only if you have the means with which to pay them back within the agreed terms, and only if it will not place you in danger of facing further financial difficulties and a potential mountain of debt that is unmanageable.

One way in which the new breed of responsible payday loan lenders operates is to offer a complete transparency of the process of awarding a loan. This includes the entire application process, the credit checks that are taken to check applicants are eligible, and the loan repayment methods and structure. This increased transparency is a way of building trust with consumers. It fully informs a potential applicant before they go through the process, providing them with all the information they require before making a decision on what to do.

Transparency also ensures that the continuous payment authority is not used in an inappropriate manner, for those who are in financial difficulty. The continuous payment authority is an agreement between two parties, whereby the a person has given a business the permission to regularly take money from your debit or credit card whenever they think that you owe them money.

A responsible lender will offer clear descriptions of the continuous payment authority prior to any agreement being made, and explain how payments are taken from your bank account. If this is not an acceptable form of payment you do not have to agree to it. A responsible lender will also ensure you know the process involved with cancelling a continuous payment authority, and the other forms of payment that are acceptable in order to make repayment on the loan.

In the day and age of responsible lending, your payday loan provider should also provide you with a single point of contact in the event of your desire to cease the payment authority. Alongside that there should always be a reminder a few days prior to an attempt to recover payment in this method, so as to make you fully aware of the process and to ensure that you are not being placed in further financial difficult as a result of the action.

With greater transparency surrounding payday loans, consumers now have more information available to them before making a decision about whether or not to apply for a loan. It helps customers of fast, short-term loan services to understand that there are options and to never fear a conversation should financial difficulties occur again.