Payday Loan Bond
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Payday Loan Bond Information
Payday loan bonds are forms of insurance that are required of anyone selling payday loans. These lenders typically offer small loans to cover expenses until the consumer is paid by their place of employment. Throughout the country, payday loans make up the newest and fastest growing form of short-term lending. These are generally done without credit checks and are generally not against a prearranged line of credit. The maturity date usually coincides with the borrower’s next payday.
Because of a few isolated bad business practices by some loan companies in the payday loan industry, some bonding companies and agencies might approach this type of surety bond with apprehension. While some bonding companies are only willing to provide financial backing in exchange for high rates, there are those who believe that the entire payday loan industry should not suffer as a result of poor tactics by a relatively small number of loan companies.
The payday loan bond will protect the consumer, or borrower, from any wrongdoing of payday loan brokers and other small lending companies. Payday Loan Bonds guarantee that any loan company that has issued a payday loan will follow all rules and regulations set forth by their state of operation. The bond is posted in order to protect individuals harmed by any violations.
Some bonding companies are very willing to write bonds at competitive rates for principals who qualify. It is important for anyone interested to work with an agency that can help them find such rates and save money.