Be Careful With The Ads Of The Payday Loans

Pay day loans offered by different payday loan lenders are strictly regulated and controlled by government authorities for the smooth and satisfactory performance of payday loan business among the borrowers and the lenders.

Even though, there explicitly applied few regulations to the providers of payday loans, still these lending companies are required to follow the similar rules which are applied to promote an advertise other financial products. Almost all the advertisements related to loans should display the APR or annual percentage rate offered by that particular website. I will tell you the conditions when APR must be shown clearly in an advertisement:

• When the ad displays the comparison of APR of a site with other financial products;
• When there offered free gifts, cash-back and other incentives in that ad;
• When the ad is mentioning CCJs, arrears, and poor credit history of the borrowers in the pitch of its ad;
• High rate of APR charged on the payday loans.

Moreover, there must be more prominent display of the APR charged by the lending company. It should be in larger form as compared to the incentives and other information given in that ad.

Many payday loan lenders used to conceal the APR rates from the borrowers, which are offered for the loan. This is because of the high rates of APRs associated with payday loans in comparison with other financial products. Naive and young consumers is the main target of payday lending companies, hence they do advertising on the websites related to social networking like Face Book etc. Many of such type of advertisements do not specify the exact rates of APRs offered by the payday loan lenders and even their true identity too. Therefore, these advertisements are contrary to the regulations of consumer protection.

So, be careful about the advertisements of payday loan lenders and carefully choose suitable loan for you.