How Small Loan Companies Are Affecting the Economy
By Alan StarcStop for a moment and pay a little bit of attention to the countless advertisements on the web. Now, browse your local newspaper and you will find a common denominator there; small loan companies advertised everywhere! As time goes by, it seems to be easier to get payday loans or apply for a small personal loan. However, far from being good news, all these small loan companies are affecting the economy, see why.
Small Loan Companies Promote Debt
One main advantage that people find when it comes to applying for a small loan is that lenders ask for little requirements. In fact, payday loans are granted almost to anyone as long as they are employed, so no credit checks nor paperwork is required to get small amounts of money deposited in an individual's bank account. If we could count all the people who have an outstanding small loan, we would realise that the overall debt of the population has increased in recent years.
Small Loan Companies Interest Rates
Another disturbing factor about small loan lenders is that they usually charge higher interest rates than any other types of lending companies. The easiness to get payday loans or small personal and business loans usually cost much more than people expect to repay, because of those exaggerated interests, people must add financial fees and other expenses that such small loan companies may charge despite they are regulated by state laws to prevent usury.
Small Loan Companies Often Lies
Many times you will find that the promises to get quick cash with no hassle are just that, an empty promise. There are companies that claim to lend you money no matter if you have poor credit, bad credit or no credit history at all. However, many of them can still perform a credit check and decline your application, making you lose time and sometimes money that they ask for to "speed up" the process, hurting your own economy and the nation’s economy as well.
Small Loan Companies Can Be Tricky
We have already mentioned that these types of lending companies are regulated by state laws, which are different for each state. Laws in each American state sets a maximum amount that people can borrow, but some small loan companies may take advantage of their location in a different state than yours to offer more money than is allowed in your case and, once again, affecting the economy of the USA.
Alan Starc is a dedicated web content writer with considerable experience. Alan’s versatility as a writer is amply reflected in his well-written posts on topics like investment, insurance, loan, travel etc.