Payday loans are available immediately, for new customers even free of charge, online, without having to leave the house. This means that more and more people reach for it, but you must always be careful not to fall victim to cheaters when applying for a payday loan. What should you check before signing your loan agreement?
Reliability and legality of the loan company
There are many companies on the financial market that provide quick payday loans. Unfortunately, the image of the market is spoiled by dishonest lenders operating against the provisions of consumer credit regulations of May 12, 2011.
The borrower should know how to check the company in which he wants to take out a payday loan. First of all, it’s worth reading about it on the internet, check the opinions and comments of users on financial portals, or ask your friends, friends and family members to express their opinions on the lender.
We must make sure that the loan company is operating legally. Each should provide basic address data, numbers on its websites. It can not be indicated on the list of warnings published on the websites of the Financial Supervision Authority.
The next step is to check the selected lender in the registers of the Loan Companies Association, Conference of Financial Enterprises and Financial Market Development Foundation. From July 22, 2017, the law on mortgage credit and supervision over mortgage brokers and agents will enter into force, which will introduce a new register of loan companies. It will make it easier for potential borrowers to check the legality of the lender’s operation.
Note on the cost of the loan
Pursuant to the Consumer Loan Act, a loan company should accurately provide potential clients with a pre-contractual commitment, which costs are associated with it, including fees for extending the loan repayment date. We can never assume that we will definitely pay off the loan in a timely manner because accidents happen and can prevent us from settling our debt. It is worth knowing what financial consequences we will incur from the lender.
A payday loan, which is considered a consumer loan, may have a maximum interest rate not higher than twice the statutory interest rate, which is equal to the sum of the reference rate of the National Bank, increased by 3.5 percent. Currently it will be 10 percent. on a yearly basis. In addition, the loan company may charge the customer non-interest costs in an amount not greater than the sum of 25 percent. the total loan amount and 30% the amount of the variable, depending on the liability period. The total borrowing costs may not exceed the amount for which it is granted to the borrower.