Beware of Online Payday Loan Sites
BOCA RATON, FLA -- Payday lenders all over the country are using
the technology of the Internet to move their check cashing
stores from the street corner to the World Wide Web. The
Internet gives customers the relaxation of getting payday loans
in the comfort of their own homes. But, there are many catches
to be aware of when it comes to these companies. According to
BankRate.com, these sites require a startling amount of personal
and financial information. They require your Social Security
number, a driver's license number, your mother's maiden name, a
home address and employment information. You also have to give
them your checking account and bank routing number.
The most important part to watch out for is giving them your
bank account information. By doing so, these lenders have access
to your account and may make unauthorized withdrawals and say
they are collecting owed funds. In some instances, these online
payday sites are not even in the United States. Many are in the
Caribbean islands, Canada and elsewhere around the world. So,
there is no way to track these companies down if they make
unauthorized withdrawals.
According to Consumer Federation of America (CFA), loan
borrowers are typically hit with a 650 percent APR's. Most of
these sites can cost up to $30 per every $100 borrowed. The
growth of these payday loan sites are astronomical and causing
major problems with law enforcement officials.
About.com states many surveyed lenders automatically renew loans
by electronically withdrawing the finance charge from the
consumer's checking account every payday. If consumers fail to
have enough money on deposit to cover the finance charge or
repayment both the payday lender and the bank will impose
insufficient funds fees.
In order to avoid using these types of companies, people are
urged to seek payday advances from their employer, put off
purchases, put a percentage of money into a savings account
every pay check and create a budget.
DMCC provides free financial education, personal budget
counseling, and debt management plans to consumers across the
United States. Debt management plans offered by DMCC help
consumers relieve the stress of excessive debt by reducing
credit card interest rates, consolidating and lowering monthly
payments, and stopping collection calls and late fees. DMCC
financial counselors can be reached for free education
materials, budget counseling and debt management plan quotes by
calling 800-863-9011 or by visiting www.dmcccorp.org. Pete
Glocker can be reached by email at pete@dmcccorp.org.