Payday loans – free from loan sharking
Companies lending payday loans are not actually the legal loan sharks; however, they are most often compared to the loan sharks by their opponents.
Around 20% out of 100% news comprise of comparison of payday lending companies with the loan sharks.
Generally, the word "loan shark" is referred by the opponent industries to those payday lending companies who charge higher fees and whose collection practices are aggressive like what implied the loan sharks. After consulting some financial experts, it becomes clear for me that payday lending companies are not loan sharks.
Interest rates charged by both the loan sharks and the payday lenders seem higher along with higher fees associated with their loans when we compare them with other credit options. However, here stops a fair comparison.
Key differences between both of them
• There are some regulating agencies for
payday loans and their lending companies, but this is not in the case with loan sharks. Payday lenders run their business as per the government laws.
• Lending payday loans is a legal business, whereas loan sharking is always illegal. It is not allowed as per the government.
• Loan sharking is a business proceeds with transactions performed “under the table”. In case of payday loans, all the transaction records are kept so, no transaction can take place illegally.
• Loans sharks use violence threats for loan collection, but this is not he case with payday loans. It means, payday lenders will never harm you and your family members if you fail to repay the loan amount on the due date.
• Payday lenders are not at all tied with crime networks; however, loans sharks are associated with an organized network of crime.
• There are government laws to regulate payday loans concerning the number of roll-overs and floating is allowed to a borrower of payday loans before collection. Floating of the loans with loan sharks can be performed till the borrower is ready to pay the fees.
So, these were points considering which, you can differentiate between loan sharks and the companies lending payday loans. With this, you will come to realize that payday lenders are not the loan sharks; in fact, they are referred as loan sharks by their opponents just because of growing business competition.
Payday loans are the best means to the borrowers to get immediate finance in the crunchy times. Paydaybank is the leading provider of
payday loans in all over the United Kingdom.
