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New rules designed by the system “ability-to-repay” include protection for the borrowers such as tests of full payments to know if their clients have the possibilities to actually to repay the debt, restrictions on roll-overs and successive loans. They also limit the possibility of applying for repeating debts. The reason is that all debtors deserve better conditions than the average pay day loan offers. With this service, clients can be protected and use an affordable option which is different from the regular loans with high risks and costs (such as title debts have). CFPB helps debtors to stay away from the financial trap.

Who supports the clients?

The new statement is created to save all debtors and their nearest people from harming companies who service their clients with offensive products like pay day and title debts.

In America, there are more companies offering a variety of loans, then McDonald’s restaurants. And this is for real. This even does not include a never-ending number of online alternatives of this type of businesses. Lenders of pay day debts are widely spread across the country big scene which build it’s success by servicing people financial offers that are by the origin made to trap people with the difficulty to repay the borrowings. Those businesses advertise by telling false conditions of a debt, profiting a lot by taking money from client’s banking cards and wallets. They state low-interest levels and hold back the annual percentage rate which determines the costs of borrowing (learn more about applying to pay day debts in our Glossary of Financial Advices here.)

What is the meaning of it?

The CFPB’s statement contains a number of major forces which are meant to stop the pay day debt cycles:

  • In order to serve the client, debt companies have to ensure and consider borrower‘s cost for a regular life and if they are bored with too much of loans already. Also, they need to look at client’s credit story.
  • Regarding pay day loans, companies have to ensure that debtor has enough finances to make through their everyday life while also repaying the borrowing and other charges they might have. 30-day term after the final payment is listed too.
  • For long-lasting debts, companies need to ensure that the client has the ability to repay the borrowing charges, basic living cost and other expenses such as financial obligations while the terms of an offering. For the installment debts coming with the balloon charge (big repay amount at the end of the term) lenders have to look up if the customer has enough of wealth to last for a 30-day period after the total repay too.
  • Lending companies are not allowed to issue an analogic debt to the same person for the 30-day period after the total repay since the last proposal if the borrower tries to close the previous loan with taking the roll-over debt. To issue a new loan for a customer, business has to see if the debtor can prove that this service can drastically change their situation with the finances. This rule regards long and short -lasting borrowings.
  • About the long-lasting debts, companies are allowed to refinance the borrowing only when it leads to a profit to the customer by making the repay sum smaller.
  • After the client applied for 3 debts within a 30-day period since the last repay, they become restricted in issuing a new borrowing for 30 days so-called “cooling-off” time.
  • To put it simpler, those new rules make it impossible for lenders to put clients in a row of charges, also not allowing people with definitely no possibility to repay to borrow at all. The full list of rules is listed here.

    The reason we stand for this

    We, OppLoans, strongly stand for CFPB’s new system: Borrowers deserve better than a payday loan.

    OppLoans online company who services community with an under-banking situation. We issue debts for the clients whose credit histories might not be adequate for regular loaning banks, which does not really characterize them as a target group for those firms. But we position our services and company in general as a non-traditional business. We advertise helping people who is rated as a sub-target group but are in need of financial debt because of being denied in loans or credits prior to their banking histories. These people are being targeted by pay day companies for a really long time. This happens because of profits which those firms make by issuing destructing contracts with high charges, often serving people whose chance to repay by not taking the roll-over is pretty low. And those people are more likely to work with them because of bank’s rejections.

    So, people with limited tend to come to businesses with pay day loans. They are forced to repay big charges for short-duration debts and are likely to get into borrowing trap.

    OppLoans services these customers with a safe option. Opposite to pay day offers, our debts come in amounts varying from $1,000 to $10,000 and have much longer time to repay up to 1.5 years. We inform credit companies in order for them to make conditions of their loans better. Also, we never change the penalties. The main goal of us is to transform sub-target groups of people to target, while not charging too high.

    We offer better analogs and our clients agree. We are proud of our Google reviews with an average of 5 out of 5 stars.

    OppLoans agrees with CFPB’s rules for eliminating the predator lending businesses. This system can help protecting customers and allowing them to stay out of difficult situations. We share CFPB’s intentions of helping American people who continue to get under-banked because regular pay day debts tend to harm their customer’s lives relationships, economic life, and abilities.

    If you are in the financial difficulties or know who are we recommend you to get abstain from predator services. There are a lot of better options such as our offers. OppLoans will be releasing new tools meant to support people to not get into borrowing traps. We will continue the CFPB’s support while treating predator firms’ target groups with real help for just anyone in need.