Upfront fee has been a known fact prevailing in different services including money lending industry. Ignoring the
justification of amount charged on such account, you can consider the issues of
more of hassles that undignified the industry.
The reaction was straight; many genuine
lenders cast away the system while still held in practice by many lenders. The
vernacular suggests a fee charged by the lenders in advance before the loan is
released to a borrower.
As a rule this should mean seriousness of a borrower for taking a loan by paying an upfront fee to
the lender as a token for evaluation and appraisal of an application.
This may have relevance in case of huge
amount of loans or corporate dealings etc. where such exercise is necessary,
but hardly has any significance in case of small loans. The flaw of such advance fee is now facing
competition with no upfront fee loans. You will find them under
various titles in the market.
Typically
these are small amount loans that are released for duration of one month when
it is payday loan. The duration for other type of loans is specifically agreed
between lenders and the borrowers with specific terms.
All
of these short term loans are collateral free.
Furthermore, these online operating schemes are free from
paperwork.
No upfront fee loans have become a reason
of respite to the confused borrowers that has been otherwise putting them off
in the midst of a doubtful situation whether to entertain such demands or not.
Genuine borrowers logically feel it as additional extraction of money over and
above charging interest on money lent.
Despite
efforts of using the ambiguities of legal expressions on the terminology
‘upfront fee’, lenders in favor of the fee are now facing opposition from their
peers in the industry. As a matter of
fact, the situation has almost reversed to very few well known lenders still
charging the fee.
No upfront fee loans are
small amount short duration loans as such do not just match for conducting a
huge appraisal that justify some upfront fee.
