Payday loan companies are those companies, which provide or offer short term loans to applicants who wish to be financed. One may result into requesting for a payday loan due to financial constrains which arise before the payment day is realized. As such, these loans have the unique feature of attracting very high interest rates. The loans are normally for those individuals who have an income. They do not have a credit check or a minimum requirement.
Various states have come up with a means to protect citizens from being harassed by payday loan companies since in the first place, the interest rates are structured bi-weekly or monthly, increasing at a high rate to the extent that one may not only default to repay the interest but also the loan. It should be noted that under the Texas laws, payday loan companies are expected to collect the defaulted loans without becoming abusive, harassing or even issuing of threats. These actions are classified as illegal and if proven true, the loan company may be heavily fined and sanctioned.
Payday loans are considered as civil loans. As such in case one defaults, this is not considered as a criminal matter thus these companies cannot enter a criminal charge against the defaulter but rather, it is a civil matter. These offers a sigh of relief as most of these companies use unconventional means to recover their loans. For instance, some may go to the extent of seizing assets such as a house. In such a case, they would have gone against the provisions of the law.
Despite this, when one defaults in payment, the company may file a suit in a civil court. This happens when there is no evidence showing that the payday company violated any of the set laws that govern their operations as regards to recovery of such a loan in Texas. In effect, the individual is deemed to have defaulted in payment out of his or her own inadequacies not by coercion. This implies that if found guilty, the individual would be expected to repay the loan, the interest of which is to be determined by the judge. As such, room is not left for intentional defaulters. Before taking up a payday loan therefore, it is vital to understand the law that governs payday loan companies in the state in which one is living in.
Various states have come up with a means to protect citizens from being harassed by payday loan companies since in the first place, the interest rates are structured bi-weekly or monthly, increasing at a high rate to the extent that one may not only default to repay the interest but also the loan. It should be noted that under the Texas laws, payday loan companies are expected to collect the defaulted loans without becoming abusive, harassing or even issuing of threats. These actions are classified as illegal and if proven true, the loan company may be heavily fined and sanctioned.
Payday loans are considered as civil loans. As such in case one defaults, this is not considered as a criminal matter thus these companies cannot enter a criminal charge against the defaulter but rather, it is a civil matter. These offers a sigh of relief as most of these companies use unconventional means to recover their loans. For instance, some may go to the extent of seizing assets such as a house. In such a case, they would have gone against the provisions of the law.
Despite this, when one defaults in payment, the company may file a suit in a civil court. This happens when there is no evidence showing that the payday company violated any of the set laws that govern their operations as regards to recovery of such a loan in Texas. In effect, the individual is deemed to have defaulted in payment out of his or her own inadequacies not by coercion. This implies that if found guilty, the individual would be expected to repay the loan, the interest of which is to be determined by the judge. As such, room is not left for intentional defaulters. Before taking up a payday loan therefore, it is vital to understand the law that governs payday loan companies in the state in which one is living in.
