Payday loan lenders in the UK are working on a new code of practices for their industry and will soon unveil the details. There is effort being made into limiting the amount of consecutive payday loans in which a borrower can take out. This new regulation is set to protect those customers who cannot afford to repay a loan from taking out another. Many borrowers get caught up in a cycle of taking out new loans to repay old ones. The fees add up and the customers fall into a cycle of debt trying to keep up. The UK firms are slow going to work on better communication for data-sharing with credit reference agencies.
For those of you who know a bit about the payday loan lender, then this topic should not seem too foreign. There are many states here in America which has already placed guidelines in which payday loan lenders can operate. In fact, there are new proposals right now in several states continuing to try to add new regulations as well as rework old ones. The main purpose for these laws is to protect the citizens of the state and keep the predatory lenders out.
Payday loan “brick and mortar” lenders have certain rules in which their place of business must follow. Online payday loan lenders are regulated a bit different with unlimited web access. There are no lending policies, capped loans amounts, limited interest rates and some states have limited numbers of loans regulated. There are payoff rules and regulations as to how many loans can be out at once. With all of these regulations in place, there are still borrowers and lenders who are not responsible with their part of the process.
The UK Consumer Credit Counseling Service put pressure on the country’s lenders as they have seen an abundant rise of unemployed people being approved for payday loans despite the fact that repayment of the loans seems unlikely. The counseling service is working with many folks in the UK trying to get them out of the payday loan cycle of debt.
Online Payday Loan Lenders From Abroad
When you are searching for an online payday loan lender on the Internet, take precaution and find out where your potential lender is located. Once you know the lender is located within the U.S., and not affiliated with Native American tribes, (they are not regulated by the state laws), then you will still want to shop around for the best prices. You will find companies who will charge higher fees and/or interest rates and you will find those which offer loans with lower rates. If you live in a state with regulations, then that lender should be following them. A customer could find lenders who do not want to follow the regulations. Avoid the possibility of falling prey to a predatory or fraudulent lender and stay clear of those offers which sound too good to be true.
Payday loan lenders are not the only industry which has had its share of fraudulent imitators. Money attracts dishonesty and people have to beware. Do your homework when finding any company to work with.
