Are Payday Loans Unreliable? The Same Question Again and Again.

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There are various ways to get some money when you are broke: to moonlight, to sell something, to borrow from your friends or to approach some special organizations such as loan organizations.

Loan organizations that provide people with money are mostly payday. This means that a person who borrows money from them should pay this sum back on the first payday; otherwise it would be increasing every following day according to the interest rate. Because of that many people reject taking such payday loans, but on the other hand it is a great opportunity when you need to get money immediately. Anyway before borrowing from any of such organizations we have to find out more information about them and look what is going on in this field of payday loans.

The recent news

Today almost everyone is aware of the trial of Scott Tucker and his attorney. Tucker is a race driver, a participant of the popular races such as Level 5 and Le Mans 24. Tucker and his attorney, Timothy Muir have been accused of racketeering, money-washing, and illegal debt collection.

It is said that there have been several lending organizations under Tucker’s control. And their mutual income for nine years (from 2003 to 2012) exceeded 2 billion dollars. It is claimed to be one of the largest criminal cases in the United States connected with the sphere of payday loans.

The investigation of Tucker’s case was conducted by Federal Trade Commission. It found out that the interest rates of the loans were concealed and the debt of a person who took 300 dollars could turn into 1000 dollars within a year. In fact interest rate could reach even 700 per cent.

Manhattan U.S. Attorney Preet Bharara also admitted that Tucker spent about 100 million dollars that he earned from these organizations on buying racing cars and a house and financing his team. In 2018, Scott Tucker was sentenced to more than 16 years in prison.

Is the situation so bad?

As in every business in loan business there are also people who act unfair, whose only aim is to earn money and as much as possible. Scott Tucker’s case is a good example. But it does not mean that every organization that provides such loans is bad and not worth to be trusted. There are organizations that would expect you to pay the sum clearly stated in the contract taking into account your prescribed interest rate and would not ask some extra money for nothing.

You may ask how to find such an organization. The answer is simple: just check. Before taking a loan, check the information about the organization that lends you. They should have Better Business Bureau accreditation. It is a non-profit organization that helps consumers to find out if they are dealing with reliable companies or not. If your company has such BBB accreditation it means that you can trust it. Also, the organization should have all the contact details including physical address, phone support or live chat.

In addition, before taking a loan try not to be lazy and search the internet for some reviews of the work of the organization. If many people are satisfied with its work, so it is a good sign.

The next thing you should do is to read your contract carefully and ask a consultant if something is not clear for you. Signing the contract you have to be sure that you fully understand its content, know the terms when you should pay and the sum of money that you have to pay back.

Payday loan is a very controversial issue. Many people have a negative attitude to it and they have their reasons for it. But sometimes people need to get some money immediately and payday loan can solve their problem. Anyway before borrowing from both the organization and people you should at first think if you really need it.