Although, it won’t be wrong to say that the cash loans are the quick approval loans online, as they can be availed in one of the simplest and easiest ways. However, despite its various advantages, it comes along with a set of flaws for which it is being highly criticized and the borrowers are being advised not to opt for these quick cash loans unless the circumstances bound them to do so.
Enlisted below are the facts due to which these quick approval loans online are being criticized;
- This loan is almost being availed by the low or middle-income group people, who need fast money, and with this loan available at their end, they tend to use it more. Moreover, they are not able to get the other bank loans or personal loans as they are unable to neither meet their requirements nor fall into the income group which is the mandatory requirement of these banks. The last option which is left for them is the cash loans, which involve huge fees and interest leading to an increasing amount of expenditure and depletion of their assets.
- Collection methods: The methods of collecting the loan should be the same as that of the other loans which are being granted by the bank or the other financial institutions. The lenders should not resort to unfair practices to collect the loan, and the same should be regulated by the regulating authority to save the interest of the borrowers.
Usually, borrowers are asked to give the postdated cheques, which are being deposited by the lenders in the accounts. However, if there is low or no balance in the account of the borrower, the cheque may bounce. Hence, in this case, the lender may intimate the borrower of the same and may request him to make the first request the borrower to make the payment by another method. The lender may resort on selling the debt to the third party for collection of the amounts lent
- Pricing of the payday loans: It is not hidden from the people availing this loan that the overall cost of getting the loan done is too high, and it includes, both the processing fees and the interest rate which is being charged by the lender. The justifications against the higher price of the security are the processing cost which is said to be higher than that of other loans. It is further argued that the lower interest rates will be of no benefit to the lenders.
In case of bank schedule, a proper repayment schedule is being prepared by the bank stating the amount of interest, repayment of principal, and the total amount of investment, however nothing like this is in the case of cash loans, which is repaid according to the sales or paychecks of the borrower.