Guaranteed loans versus unsecured loans and APR issues
Guaranteed loans attract customers because of their installment scheme, and offer the advantage of generating payments over a longer period of time. When you are considering taking out a loan, the long term interest rate of the guaranteed loan will be more attractive than the high interest rate on payday loans. The simple undeniable fact that those abbreviated terms that meet immediate needs are not considered, which is something you can never expect from your secured loan. The grueling effort is involved in getting a secured loan, while payday loans are just a few clicks away. The high interest rates on this financing option can be compared to the collateral you have to provide to get a secured loan. Even then the cash loan regarding interest rate (APR) can be justified due to the high risk factors involved. The fact is that the APR is calculated on an annual basis, which will not apply for a salary loan. Mentioning the applicable APR is just a legal formality that payday lenders follow, it is one of the features that shows you maybe the lender is responsible, and genuine.
Responsible Borrowing
Due to the simplicity of accessibility to this loan, it may be very easy to catch up, and use the loan over and over again. As a consumer, it is important to know that managing personal finances ultimately becomes your responsibility. Just because you will find financial services that are efficient and readily available doesn’t mean that you are taking them for granted even if you have no interest. Bank overdrafts, plastic card cash withdrawals, and payday cash withdrawals should all only meet temporary financial needs. They should not be considered a long term financial option.
Responsible Loans
Short-term loans should only meet temporary financial needs, and any genuine lender who follows a responsible lending policy can make it right for the customer, in every way that you can. Genuine lenders can have a registered license number, which can be verified. They will be transparent and open about each of their bills, and there will be no hidden costs involved. True lenders can make sure that you are not overburdened, so they will not offer you a loan if you are already deeply in debt, if you have taken an overdraft, or if they find that you will not be able to credit the amount. Original lenders are also connected with credit verification agencies, and if you are successful in paying off your loan, they notify this agent of your profile status, stating that you are not a high-risk borrower anymore. This helps build your credit profile, and over time you will become eligible to receive more money, from other credit sources.