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of dispute. Mandatory arbitration often favors lenders over borrowers.

7. Many Internet Payday Lenders ignore the state laws regarding payday lending in both the borrower's and the lender's home state. If an Internet Payday Lender includes a renewal option in the loan documents and the both the home state of the borrower and lender forbids any type of rollover or renewal, then the borrower should immediately pass on taking the loan. If a payday lender is ignoring state laws or tells the borrower that they do not need to comply with the state law for some undefined reason, then the borrower should avoid working with that lender.

8. Payday Lenders who operate out of country who arrange the loan with verbal agreement over phone and no written contract: Avoid these payday lenders like the plague. They are operating illegally: 1) All loans, even payday loans, require a written contract; 2) contact numbers are hit and miss; 3) they often overcharge in interest and 4) contact numbers are hit and miss. Yes, point 2 and 4 are repeats because the point bears repeating as does: THEY ARE OPERATING ILLEGALLY and AVOID THEM LIKE THE PLAGUE.

9. Payday lending is not legal in all states. New York, Georgia, North Carolina and Maryland have outlawed payday lending. This includes Internet Payday lenders.

10. Not all payday lenders are evil loan sharks who are hiding behind nefarious and murky state and federal laws in order to gouge people and drive them into payday loan hell. There are payday lenders who operate in full compliance with state laws of the borrowers, but the borrower needs to look for those payday lenders so that they can consider them when applying for a payday loan. If at all possible, borrowers should look for payday lenders who use the borrower's home state as the Governing Law and that the payday lender is complying with said state laws.

With the economy in an uncertain state, payday lending is on the rise. The situation that is pushing people to take these loans are not the same as in years past. Borrowers who take payday loans are often doing so because they feel that they have no other alternative. However, borrowers must educate themselves on this type of loan more than any other kind due to its unregulated nature and the availability of these loans via the Internet. It is not an industry that protects the borrower so borrowers need to protect themselves and the more the borrowers know, the better it is for the borrowers.

Learn more about this author, SE Mathews.
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