PAYDAY LOAN LENDERS ARE ALSO ON EQUAL RISK
Payday loan is a small short-term financial tool that allows a borrower to cover expenses until next payday. But if we look into backside of this we came to know that payday loan lenders are at higher risk as compared to the borrowers. This is strange but very true. It can be explained in the below points. Before giving loan to the borrower the lender must look into some of the following details:-
1) Borrower details are very important.
2) Lender must have sufficient money in hand even if the borrower is unable to pay back the amount on stipulated time period.
3) Lender must not put the borrower under stress if he is unable to pay the loan on the due date as this may have an adverse affect on the borrower.
4) Lender must not extract very high interest from the borrower.
5) Lender must be patient when the date of payment is rescheduled and must not take stress.
Payday loans may also put the payday loan lenders in the state of pendulum. The lender may also think continuously about his getting the money back from the borrower whether he will be getting money on time or not.
Not only this, Lender needs to maintain a healthy relationship with the borrower because his money is in other’s hand and he needs to take the money on time and with the appropriate rate of interest.
It is ultimately Lender has to suffer because in case of payday loans, there is a possibility that no legal documents are made. Then revert of money from borrower may become a difficult task. Some people feel that it is only the borrower who is at risk but the lenders on the other side are much more insecure because their money is involved, very likely to the two sides of a coin.