Payday loan lenders are in a great position of power. As we all know, with that great power comes great responsibility. They need to be able to balance their own personal interests with those of the people who are coming to them for help. If this is not the case, then they are simply not a good lender, and something needs to be done about this.
What is responsible lending?
There are certain practices which all lenders should engage so as to provide responsible lending services to their customers. When they fail to meet this obligation, they are very much disrespecting their customers, and in some cases they could even be breaking the law.
Responsible lending starts with being completely upfront with customers about the options they have. This means doing things like providing them with all of the details of their loan before they are made to sign anything. As it happens, this is actually written into the law that they must provide this information, so a failure to do so is far worse than just being a bad lender, it is actually in violation of the law.
What is responsible borrowing?
Lending is not a one way street. Just as lenders need to be responsible for taking care of their customer’s needs, so too do customers need to make sure they are taking care of their own needs. This means that they first need to be sure they know of all of their rights before going in to get a loan, and secondly they must never borrow more than they can afford to pay back. As a matter of fact, some may find that they do not need to get a loan at all in the end, and if this is the case, then they need to walk away and simply not accept any loan.
Borrowing responsibly means not doing something like trying to take out two loans at once. People have tried to do this kind of thing in the past, and it almost always backfires in their face. Most people are going to have a hard enough time accepting just one loan and paying it back. Taking on two of those loans is just asking for trouble. Instead, it is better to keep your borrowing within reasonable limits so that you will always be able to pay back the money that you have borrowed without any difficulties.
The main thing that people forget about payday lending is that they do have rights. The practice of payday lending is under the microscope of the law, and those who borrow these types of loans are actually relatively safe from fraud or other harmful practices. They just need to make sure that they know their rights and are willing to assert them. If they can do both of these things, then there truly is nothing for them to worry about.
The first right that all people borrowing this type of loan have is the right to full disclosure. They have to be informed of everything that is in their loan before they have to sign anything. They also need to be aware of the fact that lenders can get into a lot of trouble if they are falsely advertising something about their loans that turns out to not be true. When this is the case, the borrower has the right to inform the proper agencies and have this kind of thing taken care of. No one wants to have lenders out there getting away with not telling the truth about their loans.