A number of people like to pigeonhole lenders and borrowers of pay day loans to make a point. There is the claim that people don’t know the terms of the loan when they borrow money. Some like to allege false or fraudulent advertising. There is, though, a universal truth about stereotypes. That is that they aren’t really true.
Telling the payday loans terms is required
Any loan lender, including a lender of pay day loan, has to disclose the terms of the loan up front. In 1968, the Truth in Lending Act had been passed which is why this is required. This makes it so paydayloan stores are good at displaying the rates, fees and terms. They generally have them displayed somewhere. The trade groups that payday loans and cash advance loans lenders belong to all have a code of standards referred to as “Best Practices.”. Those standards consist of disclosing all terms up front and full compliance with the Truth In Lending Act. These Best Practices are mandated by the Community Financial Services Association of America, the Online Lenders Alliance and the Financial Service Centers of The US.
Stereotype is shown to be wrong in studies
Studies show that terms are disclosed and people know what they are doing. People don’t get payday loans in ignorance. Even as early as 2001, studies of secured loans customers revealed the stereotypes didn’t hold up. One study found that of the payday loan store customers surveyed, 95.7 percent knew what the finance charges on their loans were. 78 percent of those remembered getting an APR disclosure. A person can’t be fooled by what they actually know.
Hysterical claims never hold up
Many people will make others out to be victims although that isn’t actually what is going on. The hype often doesn’t live up to reality. You can read more within the Payday Loan Facts and Statistics Record on Personal Money Store.
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