How to Tell if Your Cash Loan is Trustworthy

When you search for any sort of financial advice online you are almost immediately inundated with advertisements for “cash loans” and “no credit loans” and “get cash now!” Obviously, these ads can be tempting, especially if you are in need of a loan. The truth is that there are far more scam artists out there than legitimate lending operations. This does not mean that there are no legitimate online lenders or that all offers of cash loans are bogus. On the contrary–some cash loans are backed be legitimate financial institutions.

The easiest way to tell if the company promising your “cash loans” is legitimate is to do some digging into the company. Find out the street address for the company. If there is no street address or if there is only a post office box, move on to the next company. If there is a street address, check into the city, county, and state business records to make sure that the company is registered properly. If you cannot find any business listings for the company in its own state or in your own, move on to another financial institution.

If there are business records, check the company’s rating with the Better Business Bureau and the Federal Trade Commission. Make sure that the company is not under investigation for fraudulent activity and that it has a good reputation. If it looks shady, move on. Finally, make sure that you are able to call the company directly and talk to a person (or that you can visit its offices if they are located in your local area). If there either is no way to communicate directly, vocally, or face to face with the company, move on to another company that is offering you the opportunity to apply for a cash loan.

Your first stop on any cash loan quest should be your bank. You might be able to take out a loan if your account is in good standing and you have a good history with the bank. If your bank turns you down, your loan officer might be able to point you to another legitimate source of case. One that isn’t out to make money off you by charging you extra high fees or is only in search of your personal information. Remember that the rule of thumb is always, “If it feels shady, walk away.” Trust your gut!…

regulation, USA payday loan

Government Drops Amendment Regulating Payday Loans

Think the companies that pass out payday loans care about their costumers? That seems unlikely now that one of the top officials for the country’s largest payday lender, Advance America, has basically outlined the industry’s methods for hooking customers into an endless series of high-interest-rate payday loans. The Los Angeles Times recently reported on the confidential e-mail messages that Dan Mart, a divisional director of operations for the company, wrote to his employees. The underlying message of these e-mails? Advance America makes its money by making sure that borrowers keep taking out small loans with incredibly high interest rates.

The E-mails

According to the Los Angeles Times, Mart wrote his e-mails in response to a proposal, since scuttled, in the financial reform package now headed toward Pres. Obama’s desk that would have limited the number of payday loans that payday lenders could make to their customers in a specific period of time. Mart wrote in his messages that after customers repay their loan, they’ll ask for a new one. At this time, Mart wrote, payday lending employees were supposed to tell their customers that they couldn’t make another loan to them because the government has put them out of business. Mart then advised his employees to tell customers to write their senator and congressman. There are two problems with Mart’s e-mail. First, the information in it is incorrect. Secondly, it underlines the business strategy of payday lenders: They only succeed when consumers continually take out their loans. And when consumers do this, they rarely escape the cycle of debt.

The Failed Amendment

Mart was incorrect. The proposed amendment by Sen. Lay Kogan, a Democrat from N.Carolina, would have forbidden payday lenders from issuing more than six loans to any one borrower in a 12-month time. That’s not nearly the same as telling payday lenders that they can’t make more than one loan to a customer. That point is moot, though. The payday lending amendment is no longer part of the financial reform package that Obama will sign.

Payday Pressure

Credit a strong campaign by the companies that issue payday loans for scuttling the amendment. The association that serves payday lenders sent memos to these businesses across the country, requesting that they ask their customers to write letters and send e-mail messages to their federal politicians. The industry trade group also put out a statement saying that such an amendment would deny emergency loans to hardworking Americans. That all sounds good. But it’s hard to deny the message implied by Mart: Payday lenders want to protect their profits, and that means hooking consumers into taking out a string of high-interest loans.…