3 Ways Your Guaranteed Payday Loan May Backfire
While many people think that guaranteed payday loans are blessings in disguise, they caused tons of miseries for other borrowers as well. A guaranteed payday loan is a form of unsecured loan offered to people with low credit rating and those who are living from paycheck to paycheck. If you’re applying for this loan, you don’t have to worry about credit investigation processes. Most guaranteed payday loans only care about your repayment capabilities anyway.
But be careful – a guaranteed payday loan may backfire against you! Here are some ways a guaranteed payday loan can work against you:
Guaranteed payday loans have high interest because no collateral is involved. This is part of the lender’s risk management system. However, most guaranteed payday loans have high interest on top of penalties if the borrower cannot repay. Many borrowers sunk in greater debts because of uncontrolled interest. They ended up paying more than three times of their principal. Not all guaranteed payday loans have mega interest by the way; there are still some with manageable options.
Stress in Collections
Guaranteed payday lenders are persistent in collecting what is owed. Since there’s no collateral involved, payday lenders will do everything such as legal actions or verbal threats. They may even send collection agents and make you frustrated. Many borrowers are suffering from the abuse of vicious payday lenders. So if a guaranteed payday lender is stressing you out, take immediate action.
Some guaranteed payday lenders are known for their entrapment tactics. Their systems are designed to pommel a borrower to the ground until he is overcome by debts. Another trapping tactic is the act of lowering the interest to entice the borrower into re-applying for the loan. Once you encounter a lender guilty of doing this, look for another one. With hundreds of guaranteed payday lenders competing in the lending arena today, there’s a chance that you can find a lender that’s truly worth your time. An in-depth research can also help. Comb through reviews in social media and online loan directories. Unbiased borrower reviews will help you know which lenders can be trusted and which ones must be avoided.
To ensure that guaranteed payday loans will always work for you, stick to a plan. If you’re under a guaranteed loan agreement, your first goal is to get rid of it. You can only rely on guaranteed payday loans during critical emergencies.