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Payday loans provide quick financial fixes to individuals who do not want to go through lengthy procedures of availing loans. They are processed quickly and hence come in handy even in situations that seem urgent. However, if you are not careful about where you get these loans from, you may be charged a very high interest rate, which may eventually land you in more debt.
In recent times there has been an increase in the number of people complaining about payday loans. Action is being taken to provide compensation to a large number of people after the irregularities are detected. It may sound impossible, but there are a number of ways you can be eligible to complain and actually enjoy payday loan payback.
1. Fraudulent Debt – They are most common among complainants seeking refunds. It is possible that payday loans can be fraudulently taken out in your name. It is the responsibility of the lender to verify the identity of the customer before sanctioning the loan, but most of the people are not so careful hence there are many cases of this issue. If you are being harassed for a loan you have no knowledge of, you have every right to look into the matter. You can try to settle things with the lender or you can directly deal with the Financial Ombudsman Service to get the required assistance.
2. Unexplained repayment – Default in repayment can be serious as your loan keeps accruing in the form of interest and other charges that are attracted by failure to make payments. As an applicant, you should get very clear terms on how to repay the loan including fees and time limits. Before you take the loan, you must know exactly how much you need to pay back and within what time frame. When such important information is withheld from you, you can file a complaint to have the additional fee refunded or an unfair credit taken out of your payday loan.
3. Recurring Payments Payday loan providers collect their payment through bank requests. Most use continuous payment authorization and you should make sure you know what it is and that you can cancel it. A good lender should also inform you before withdrawing money from your bank. There are lenders who try to get money all day long and this translates into huge bank charges for you at the end of the day. You can make such a claim that certain charges can be reimbursed by the lender.
4. Financial position – You may need a loan, but it really depends on the lender how much you are eligible in terms of repaying the loan on time. Your income, employment, mental health, age, credit history and identity are some of the serious checks the lender must go through before approving a payday loan. If you are unable to repay and the lender has overlooked all the details regarding your financial position, you may in fact be eligible for a refund.
5. High Interest Rates Most people rarely pay attention to interest rates when taking out payday loans. A desperate financial situation can lead you to neglect such, hence end up being charged interest rates that are unreasonably high, making it difficult for you to repay the loan. Lenders are limited to a cost cap of around 0.8% of total borrowings. This should include interest and any other fees applicable to payday loans. If you are a keen borrower, you will be able to tell when the interest and charges are high and that way you can claim a refund from your lender.
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