Payday loans are debts a borrower owes from a lender. Debts between a borrower and a lender entails rights and responsibilities for both parties. Getting into a payday loan is a contract that is governed by terms where the borrower must pay a specific amount to the lender within the next 30 days or salary date of the borrower. Payday loans are actually one of the simpler forms of loans but still require a contract. The obligations that govern the borrower and lender must need to be addressed to liquidate the obligation due.
As a borrower, the basic rights of your payday loans are as follows:
- Reasonable Contact for Collection
Your lender does not have the authority to call you and harass you to pay the amount you have borrowed. All lenders follow a guide for lending payday loans to borrowers. They need to make sure that collection is done within a reasonable means and proper way. They are also not allowed call you during unreasonable hours, weekends and holidays.
- Lenders Can Only Contact Borrowers
At some point, unscrupulous lenders try to contact friends, family members, co-workers and other people who are directly in contact with you. This is prohibited within the payday lending guide. Lenders can only contact you as the borrower and no one else.
- Lenders Cannot Process Payment
When you find yourself in a situation losing your income and having the inability to pay your loan right away, the lender is not allowed to process the post-dated check or pre-authorize a debit more than once that render the bank charging you additional fees. Lenders are required to follow the right protocol of collecting from the lender the amount due.
A lender has the right to collect money and borrowers have the responsibility to pay. But the rules that govern a payday loan also protects the borrower from illegal practices of collection by unscrupulous lenders.