Are Payday Loans a Scheme?

According to the Better Business Bureau (BBB,) in 2012 over 300 consumers across America were  victims of payday loan schemes from a single payday loan company based  in Las Vegas so go and figure the thousands of scams performed by countless unscrupulous companies nationwide. Although, not all payday loans deals announced everywhere are schemes, there is always a chance  that you can fall into one of them, so it is better that you be aware  how to find out when a payday loan offer is real and when it is only a  money scheme.
Payday Loans
 Review Your Bank Statements Carefully

Many of the complaints filled out by consumers that were scammed by  the Las Vegas payday loan company referred above said to have found a  $30 finance fee in their accounts for payday loans they never applied for. So first thing to keep in mind to avoid money schemes associated to payday loans is review items and charges in your statement even if you have already applied for a payday loan, so you can make sure they are not taking out your money rather than depositing the money borrowed.

Beware when the Deal is Too Good to True

Because payday loans are easy to get and very little requirements to  apply are easily covered, stay alert when a payday loan lender offers  you more than you can expect from a payday loan. Things like more money  than is allowed for short term loans in your state, or when the interest  rates are too low, and the lender claims that finance fees were waived  are all signs of a money scheme coming your way.

Never Take The Maximum Allowed

Most payday loan lenders work on the premise to lend more money than  their closer competitor and at the best interest rate, but most of them  have set up similar maximum amounts you can borrow that usually ranges  between $1,000 and $1,500. What none of them tell you is that specific  laws in the state of your residence allow you to borrow much less than  the money they are offering, with very few exceptions. If the lender  pushes you to apply for more money than your state’s law permits, you  can be sure this is a money scheme to rip your money off by the payday.

Do The Math Before Applying

This is usually a personal pitfall and not a money scheme from a  payday lender and it consist of thinking that if you borrow $500 you  will repay a slightly higher amount, when the true fact is that you  might be paying 652% APR or even more. So, if you have a budget, and  your paycheck is not much more than $500, your chances to fall behind  your payment will increase as your paycheck will not cover the cost of  the payday loan.

Take Your Time to Do A Background Check

Reportedly, payday money schemes companies appear listed in the BBB,  so it is easy to prevent falling into their practices. Consumer review  sites are also a good option to find when payday loans are purely money  schemes and also to discover when a payday loan company is offering a  good deal to check it out.

Denny Jones

Hey there, I'm Denny Jones, a seasoned financial writer with over a decade of experience. I'm passionate about simplifying finance and empowering readers to achieve financial freedom. My articles offer practical advice and insights to help you navigate investing, budgeting, and personal finance with confidence. Let's unlock your financial potential together!

One thought on “Are Payday Loans a Scheme?

  1. I think not all payday loans are schemes. It is just that an individual must be very vigilant when it comes to his/her financial records so he/she won't have to face credit problems when applying for a loan.

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