The American economy has endured through both rigorous activity and devastating slumps, whether in the exciting times of the early millennial web boom before the dot-com bubble burst or the negative effects of the recession that began in 2008. People far and wide are affected, regardless of socioeconomic standing.
In the tough periods, navigating one’s fiscal scenario can be challenging, stressful, and exhausting. Many questions arise: Can I still afford retirement, even if I consider borrowing from my 401(k)? If I lose my job, how long can I survive a job hunt before I really start to sweat? Since my credit took a hit recently, how many I garner the capital I need to make the investments I want? Considering the ongoing financial turmoil, what is the best way to alter my portfolio?
To remedy a rough situation, people are often creative in the avenues they pursue for a solution. Other times, they simply cannot avoid the need for a new loan and will have to conjure the optimal course of action. Unfortunately, in an environment rife with pitfalls and desperation, there are nefarious and opportunistic individual who will try to take monetary advantage of the needy. Although “beggars can’t be choosers,” they also can’t afford to be swindled out of their money when they are already down on their luck!
Although many would say that avoiding loan fraud, or fraud in any form, is simply a matter of common sense, there still exist some basic pointers and elements to keep in mind in order to prevent a regrettable decision.
The Information Age provides countless wonderful opportunities for commerce and communication. Human beings everywhere are now able to share media, conduct business, and relate to one another on a worldwide scale without many boundaries. This, however, is also a prime channel for illegitimate businesses to operate.
In fact, the internet is so infested with shams and scams that an excellent rule of thumb is to simply never opt for what looks like a promising ad or webpage. Once a site has a credit card number, after an unfairly short “evaluation” or similar period they will often simply charge it monthly at outrageous costs for no given reason, until some obscure fine print suddenly seems to give them a right to do so. Getting this sort of cash back from them can be nearly impossible.
Another good rule is that, in seeking either locations or venues for a loan, or even other opportunities to make some part-time money on the side to make the bills a little easier to pay, you should never have to pay someone for work you do. In other words, there are thousands of scams out there that simply operate by charging you what seems like a nominal fee, but the only service they provide is essentially the same work you could have done by using a search engine. Sure, they will give you results for loan offices, or other monetary deals, but you should always put in that minimal effort yourself rather than pay someone else to cull results without making direct connections. Be extraordinarily hesitant to pursue any link online.
You see them all over: Payday Loan offices, Get Money Now shops, or other similar locales. The premise is fairly straightforward: They will proffer an amount now, and you will pay it back with interest when you receive your next paycheck. This can seem like a reasonable offer to those who really need a quick fix.
The hidden side to this deal, though, is the outrageous interest fees. Rates of 40-60% or even higher are not unheard of. While they are technically not a scam, they might as well be, since they are very effectively ripping off those who cling to them as a last hope.
The fiscally responsible person should have a “rainy day” fund put aside in case of a temporary period without income. This can be an entirely separate savings account altogether, or simply an amount in your current savings you budget for in case of a crisis. If someone does not have such a fund put aside, they should began saving liberally and cutting back on expenses in order to do so. The oft-cited total one should have available is 6-12 months’ living expenses.
Even if someone seems to be in dire straits, they rarely truly are. If you have to, borrow cash from family instead. Or simply spend time talking to your landlord or your utility companies or other bills; often, you will be pleasantly surprised at how much leeway they are willing to give when you can acknowledge you cannot pay right now but will do so next month. They are government and other-source programs for temporary relief income, along with simply searching for a temporary job, the very niche that temp agencies effectively fill for just such a need. The choice to select a Payday Loan scheme should be an absolutely final resort.
One final note on avoiding loan fraud is that, in order to check an institution’s legitimacy, and even compare rates among numerous lenders, is the website BankRate.com. Although it will not list every detail and piece of information imaginable, it, along with common sense and caution, forms an effective tool in the arsenal against fraud.