The federal Truth in Lending Act
treats payday loans like other types of credit. The lenders
are required to disclose the cost of the loan to consumers.
But some of the payday loan companies do not disclose the
terms. You should be very careful about these companies. Payday loan — secured by a personal check or paid by electronic transfer is very expensive credit,
therefore you should only take the loan, if you're sure you
can pay it back promptly. You Should understand the never-ending cycle that payday loans
can get one into, if you are not careful.
There has been several warnings about payday loans that
you need to be aware of. FTC Consumer Alert issued this
alert. The Consumer Federation of
America (CFA) has been warning consumers to exercise extreme
caution when using Internet payday loan sites, where loans
due by the next payday, can cost up to $30 per $100 borrowed
and borrowers typically face annual interest rates (APRs) of
650%.
Never borrow money that you honestly know
you will not be able to repay on time.
Ask and know the exact amount that will be deducted from your bank account before signing any loan documents.
