With the world financial crisis still looming over everyone’s heads, people are now thinking long and hard about availing of loans and cash advances from financial institutions. With people losing their homes, cars and other properties due to non payment, they are now very skeptical about loans no matter how fast, easy and tempting it may be.
Financial institutions such as banks are now making it so much easier for people to avail of cash advances, some to the extent of not going through background checks just so they could entice people to apply for a loan. For as long as anyone can remember background and credit checks are a must before approving a person’s application for a loan because the results of the checks is the basis of whether a person can pay the loan or not. Should there be difficulties up ahead and the borrower can no longer pay the loan amount, the company can always get back that person’s property as payment for their loans. This is what is happening now not just in the United States but all over the world. Is doing away with background checks a good move or will it wreak more havoc in the long run?
People have to understand that despite the fact that people are now having a hard time paying their debts, a lot of people would still want to avail of additional cash especially if it’s very easy to get hold of. Most of the people who go ahead and apply for these are those who are up to their necks in debts and are being hounded by the companies they owe money to. The quick fix for most of these people is getting more loans to pay back the old ones. What they do not realize is that it will bite them back in the long run. For example, a middle-aged, unemployed married man has to pay his card debts. He is told that if he cannot pay the minimum in such a time he will be charged with more interest until it would be impossible for him to pay off his credit card debt. If he avails of the quick-fix loan and pays off his credit card debt, he is now bound to pay the company who lent him the money to pay off his debts plus interest. Since he is unemployed, how can he now pay for his new debt which is higher compared to his old debt?