(Newswire.net — February 14, 2018) — There are many people who find themselves in need of short term finance to tide them over for a short while. Many have turned to finance options such as payday loans and car title loans in order to get the finance that they need. For some, this has been a financial lifeline particularly in cases where the person has damaged credit and cannot get traditional finance such as a personal loan or credit card.
While these loans have helped many people out financially over the short term, concerns have been rising over recent years in relation to the interest charged. As a result, the CFPB took action last year by ensuring that lenders first checked the affordability of the person applying for the loan. In the past, some lenders did not take affordability into consideration and simply lent out the money without doing a credit check. This put many people into a difficult situation after they were granted loans that they could not afford to repay.
The good and the bad
Some people wonder whether the CFPB has gone too far with its stance on payday lenders and car title lenders. Well, there are mixed reactions with regards to this. On the downside, it means that some people may not be able to get the money that they need when they are in financial dire straits because they do not have a good credit score or are deemed unable to afford the repayments. On the upside, it can help to avoid the situation where people end up in debt that they cannot afford to repay.
Finding the right payday or car title loans can help to keep you protected as well as enable you to get the finance that you need. A responsible lender will carry out credit checks and they will ensure that you can afford the repayments on the amount that you borrow. While this may not please everyone who applies for a loan, the point is that it will stop many people getting into severe financial difficulties with a loan that they cannot afford the repayments on.
Of course, as is always the case, you should make sure you compare lenders before you make any decision. In addition, you need to go through your budget and work out whether you can realistically afford the repayments on the loan, as otherwise you could end up in an even worse situation. If you are happy that the repayments are affordable, you can go ahead and make your application. It may be worth doing a credit check on your score before you apply, as this will give you more of an idea when it comes to whether you will be accepted for the loan. You can then avoid the situation where you are turned down for credit, which can have an adverse effect on your score and will affect your chances of being able to get any form of finance in the future.