Sometimes, through no fault of his or her own, a person ends up in a very precarious financial situation. When cash is needed quickly, it may be the right time to apply for a payday loan. If you read this article, you can find out more about these kinds of loans and how to use them safely and responsibly.
- Find the best rate: There are many payday loan companies out there, and they vary greatly. Compare different lenders and look for the best interest rates. You may be able to save money by comparing companies to find the best rate. The fees charged by a lender have to be understood before you apply. You do not want to be surprised at the high-interest rates. Do not be shy to just come out and ask a payday loan company what their interest rates are.
- Be honest: A useful tip for payday loan applicants is to always be honest. You may think you’ll get a better loan if you embellish the truth, but you may end up with jail time instead. When you have to pay back the amount you owe on your payday loan but don’t have the money to do so, see if you can get an extension. Some companies can extend your due date by a day or two. Just be aware that you may have to pay more if you get one of these extensions.
- Pay periods: Watch out for automatic additions of finance charges to future pay periods. This results in people paying all of the fees without ever paying back the loan. Consumers have been known to pay five times the original value before ever getting out of the loan.
- Personal information: Be careful when it comes to giving out your personal information when applying for payday loans. Because it may be required that you give out personal information, realize that some scams exist. Double check the legitimacy of your payday loan lender.
- Do not borrow a lot: If you are thinking of getting a payday loan, do not borrow a lot. While true emergencies do happen, payday lenders charge so much interest that you would be better off finding funds elsewhere if you can. Minimize the costs by keeping your loan amount to a minimum. If you are considering a payday loan, look for a lender willing to work with your circumstances. Some lenders are willing to extend your loans if you cannot pay them on the due date.
- Up costing: You should know what the payday loan will end up costing you. Most everyone knows there are high-interest rates associated with payday loans. You may not know, however, that there are admin fees many lenders will charge. The fees you might incur can be hidden in small print.
- Better Business Bureau: You can find ratings of some loan companies at the Better Business Bureau. Check to see if any complaints have been filed against this particular company through the BBB. If you see this company has many complaints, then it’s in your best interests to look elsewhere. It is a good practice to look for the best loan rates before filling out payday loan applications. See if getting a loan online is cheaper than doing so in person, and choose a lender that has the best interest rates. You could end up saving quite a bit of money.
- Consider options: Payday loans should be your last resort. There are a lot of fees and interest with these loans, which could cause financial ruin. Borrowers have to sign contracts that feature virtually no way of escape. Before you take out a payday loan, consider all of your options.
- For self-employed: If you’re self-employed, consider taking out a personal loan rather than a payday loan. The reason for this is because self-employed persons are rarely granted a payday loan. Payday loan lenders require proof of guaranteed future income. Payday loans can cause you lots of problems with high fees and interest. Be sure the company you deal with has a good reputation. Try to find one that has a good reputation as well as a few years of business behind it. That is the most effective way for you to avoid scams masquerading as payday loans.
- Consider from: A payday loan should be your last resort if you are in need of money. You should consider asking friends, family, your local bank and your credit union for money before visiting the offices of a payday loan provider. Payday loans can be costly, so it’s important that you stay away from them if you can. There are quite a few different payday loan companies out there. This is the reason that it’s important to research the company before you choose it. An organization called Better Business Bureau collects information on many kinds of business, including payday lenders. The BBB has companies listed that have had multiple complaints.
- Agrees to all the terms: Taking out a payday loan may very well be a trap, so having the entire terms of your contract in actual writing is a smart move. The terms for your loan may be different than the advertised terms and conditions; in addition, the person you talk to may not be fully educated on the subject. Read and understand the contract and get clarifications on any parts that are confusing. Prior to agreeing to a payday loan, it is important that you aware of and agrees to all the terms. While you may be in dire need of quick cash, if you can’t pay it back by the time it is due, you are going to be in a world of financial trouble.
- You can choose: Before choosing a payday loan company, you need to look at your finances. Figure out how much money is necessary for basic expenses. You should not borrow against this amount. You should only take a loan based on the amount you have left over after you pay all your expenses. It’s a handy rule of thumb to keep the size of your loan under one-quarter of your paycheck when at all possible.
You’ve read a great deal about payday loans and with any luck, you now have more information about the subject. The one hard-and-fast rule here is that the more you know and the sooner you know it, the better off you’ll be. Don’t hesitate to keep researching. Getting your financial house in order should be your top priority.