What happens when an applicant is not completely honest on the payday loans application or after loan approval? A good lender will find out. Not all companies will lend money to just anyone who applies. In fact, anyone who is trying to apply for a loan fraudulently will only end up hurting themselves the most in the long-run.
Money difficulties create desperate attempts for cash. Some people will sell their jewelry, clothes, computers and televisions to solve a money crisis. Others will run to friends and family begging for some support. What do you do when there is no money in the bank and no credit available?
There are many folks who will run to a payday loan store to apply for the short-term loan. Each lender has their own set of qualifications, but in general most ask for similar items. An applicant must:
*Show proof of identity with an approved photo ID
*Show proof of employment
*Have a checking account and present post-dated check for future payoff
*Show proof of residency.
Now what a lender does with this information is up to them, but are responsible one will want to make sure it all checks out. Once the loan is signed and a borrower moves or changes banks in order to escape a payoff, the loan price steadily climbs. Extending a payday loan is quite pricey. A lender trying to cash your pre-written check only to find out that the account has been closed.
Payday loans come at a cost. The terms and conditions will clearly spelled out the cost of the initial loans as well as the interest rate which will be charged against any unpaid balance. What may not be so clear in the final cost analysis of the loan is all the "other" fees which are then attached to the outstanding balance when mishaps during the payoff occur. The more mishaps, the longer the loan goes unpaid, the larger the balance grows and the more interest racks up.
A lender will only fight so long to get their money. Selling it to a collection's agency may be the best option when a borrower refuses to pay up. The hard part about not being up front with a lender is that they tend not to be so flexible if you are looking work at paying towards the loan. Once the loan goes to collections, there is no dealing with the initial lender.
Let a loan go this far and the no credit check easy fast money becomes a big negative mark on your credit report. The collections agent will report it as bad debt. Know what you are getting into and be truthful in the process. If you are worried about not being able to repay and try to hide instead of face the payday loan lender, you create more trouble. Most lenders will at least listen. They understand that troubles arise. If anything, you may be able to keep extra fees from accruing to your unpaid balance. Something is always better than nothing, and being upfront is the way to obtain it.