There have been a lot of different reactions to this notice over the last couple of months. Some people are all for them, while others are worried about their ramifications.
What’s the truth, though? What do you really need to know?
Read on to learn more about what the future looks like for payday loan no credit check lenders.
You’ll also learn some important information about payday loans and how you can find a reputable lender in these new times.
Proposed Legal Changes
In 2017, the CFPB introduced a variety of new regulations that were meant to protect at-risk individuals from potentially predatory payday loan tactics.
In February of 2019, the CFPB announced that it would be rolling back these regulations.
What Will Change?
The 2017 Rule determined that the two following practices used by some payday lenders were unfair:
- Offering a short-term bad credit loan or longer balloon payment loan without making sure that the borrower had the ability to repay that loan
- Attempting to withdraw payments from a borrower’s account (without the borrower’s express authorization) after two payments in a row have failed
The 2017 Rule required creditors to underwrite payday loans. It also required them to provide information about the loans they provide to something known as “registered information systems.”
The new notice, released this year, will eliminate these provisions when it goes into effect.
The Effect of These Changes
Clearly, these changes are going to have a significant impact on your personal finances. Before you decide to take out a payday loan, it’s important to know how these changes will affect you and your ability to qualify for one.
Here are some of the main ways in which the CFPB’s notice may affect your payday loan borrowing:
When these new changes go into effect, the process of applying for an online loan will change quite a bit.
Because a payday lender will not need to verify that a borrower can repay the loan before they approve them, more people will be able to qualify for payday loans than may have qualified for them in the past.
Payday loans are already quite easy to obtain, so it’s questionable how much of an impact this new change will make.
For some people, these new changes could lead to greater risk.
There will be less federal oversight over personal loan no credit check lenders, so borrowers will have to take extra steps to read the fine print of their loans and ensure they can pay them back on time.
It’s important to note that, while federal payday lending regulations are loosening, borrowers will still be subject to the regulations put in place by their state governments.
Every state has different payday lending laws, and many of them are quite strict. It’s not as though the CFPB’s rule changes will not render these state regulations useless.
Things to Know About Payday Loans
When you first learn about the changes to the payday loan online lending industry, you might be a little nervous about taking out a payday loan.
As long as you understand how payday loans work, though, you likely will not have any problems. Here are some key things you ought to know about payday loans.
Small, Short-Term Loans
Payday loans are small, short-term loans. Unlike installment loans, payday loans are paid off in a single lump sum. Also unlike installment loans, the amount is relatively small, in the range of a few hundred dollars, although some can be as large as a few thousand dollars.
Payday loans are meant just to tide you over until your next payday (hence, the name).
Some payday loans can be rolled over into your next pay period, but many states prohibit this or put a cap on the number of times you can roll the loan over.
High Interest Rates
Same day cash payday loans are well-known for having high interest rates.
It’s important to note, though, that in order to be severely affected by the high interest rates, you have to roll your loan over for several weeks at a time.
Otherwise, the fees are not as serious as some people make them out to be.
Not Reported to Credit Bureaus
Guaranteed approval personal loans, in most cases, are only reported to credit bureaus if the debt ends up being sent to a collections agency.
Payday loans do not help your credit score, but they don’t hurt it either, as long as you make your payments on time.
Finding Reputable Online Payday Lenders
The other key to successful payday loan borrowing is making sure you’re working with a reputable payday lender.
This is especially important when you’re considering borrowing from an online lender.
There are plenty of reliable lenders out there who aren’t looking to take advantage of borrowers and want to help them get the money they need as quickly as possible.
Here are some guidelines that will help you find the right online payday lender for your needs:
Consider the Application
When you’re looking into working with an online payday lender, take a look at their application process.
The application should be short and easy to fill out, and they shouldn’t require tons of personal information.
Do Your Research
Check to make sure the lender is accredited with the Better Business Bureau. Do some research, too, to find out whether there are any complaints against them.
Check Their Contact Information
Finally, check to see whether or not the direct lender has contact information on their website.
Even an online lender should still have a physical address, phone number, and email address that you can use to get in touch with them.
Call their customer service line to see if you get a response from a real person.
Find Reputable Online Payday Lenders Today
Clearly, the world of payday loans is changing. These changes don’t need to be scary for you, though.
As long as you do your homework and exercise caution when choosing online payday lenders, you shouldn’t have any trouble taking out a payday loan and paying it back.
Are you considering taking out a payday loan? If so, we can help at Bonsai Finance.
Apply online for a payday loan today, and you’ll hear back as soon as possible if you’re approved! Here are some other articles you might find helpful:
Your guide to getting quick loans no credit check
Are there payday loans for people on SSI and other federal benefits programs?
Help in a hurry! 8 emergency loans for bad credit
The pros and cons of CashnetUSA loans