There are many, many online payday loan companies to choose from, so where does one begin when looking for a payday loan?
A bad idea is to Google ‘payday loan’, then close your eyes and pick a spot on your computer screen.
A good idea is to begin by understanding the payday loan process. A payday loan is a very short term loan, and almost anyone can receive a payday loan. Payday loans are offered with no credit bureau check and no upfront fee or down payment, and the loan money is available to you very quickly.
It’s easy to be blind sighted by the money you are getting now, but before considering a payday loan you must be sure that you are capable of repaying the money you intend to borrow. Sure, you may want $1500, but can you afford to pay $1500 on your next payday, plus a lenders fee?
Once you are positive that you need a payday loan, and that you are capable of responsibly handling a payday loan, you want to do the responsible thing and narrow down your options. This may take a bit of time, and research, but this is time well spent for the hassles you save later down the road.
On a piece of paper, write down the payday loan amount you need that you can afford to repay.
Underneath that number, write out a complete list of what is most important to you with a payday loan and keep this list in front of you for reference. The top 5 things you should be looking for are rate, loan terms, rules/regulations, trustworthiness, and reputation. None of these 5 things are ‘ranked’, because they are all equally important.
Knowing what you need (as well as having educated and realistic expectations) will help you to ‘weed out the predators’ and narrow down your list so you can get the best payday loan to meet your needs.
Rate varies tremendously from company to company. While some payday loan companies will charge an affordable and flat payday loan rate like 15%, others charge up to 400%.
Avoid any payday loan companies that are too subtle about their rates. If a payday loan source will not disclose a rate amount to you until you are ready to commit to a loan agreement, this is not a good sign. You should be able to know what it is going to cost before you fill out the application for a payday loan.
It is helpful to keep a calculator nearby, so you can see an actual dollar amount and have a clear understanding of what you will spend for the loan amount you need. Some payday loan companies use tricky wording to lure you in. For example, you may be attracted to “Only $5 per $100”, but you should not overlook the “per day” following in smaller print.
Loan Terms are something you need to consider before choosing a payday loan. Based on the amount you need, you may be unable to repay your payday loan in only one paycheck. There are payday loan companies that can extend your loan term up to 90 days if necessary, but there are additional fees that need to be factored in.
On your list, you should have an idea of how quickly you will be able to repay your payday loan. The best thing you can do for yourself is to meet those guidelines, if not beat them. It is your financial responsibility to pay off money you borrow as quickly as possible, so even though it sounds tempting to extend the due date, this is not always the smartest thing.
Rules / Regulations vary from one payday loan company to the next, though they all have the same general concept. Although there is no credit bureau check to qualify for a payday loan, there are expectations.
Are you capable of proving that you are financially responsible and capable of repaying a payday loan? Before answering this, you should know what a payday loan company looks for. You should know you are capable of meeting a payday loan company’s guidelines before applying.
Though most don’t, some payday loan companies require a deposit to receive a payday loan, and others do run a credit check. The guidelines a company has should affect your decision.
Obviously you will want to avoid a payday loan source if you can’t meet their guidelines, but another reason the rules and regulations are important is because you wouldn’t want to choose a payday loan company whose standards are too low.
If a payday loan company has standards that are too easy to meet, this has an effect of the trustworthiness of that company. A company that will approve you for a payday loan without much proof of ability to repay the loan (for example, a company that requires your bank account information but not a recent employment history) is not a very trustworthy company.
Predatory payday loan companies will often encourage an applicant to apply for the maximum payday loan amount. As tempting as it can be, it is financially irresponsible to borrow more money than you can afford to repay.
Predatory payday loan companies like these make most of their income off additional fees they can charge when your loan is not paid in full within the agreed terms. Bearing that in mind, a trustworthy payday loan company won’t even approve you for a loan amount more than you are capable of repaying.
The reputation of a company is obviously important, but this is where you will be able to fully narrow down your list of possible payday loan sources. Searching for a company name (instead of the service they offer) will give you results. You shouldn’t rely on positive feedback that a payday loan company has posted on their website, because nobody would post negative feedback on their website.
However, that won’t stop unhappy customers from posting negative feedback of a company on blogs or social networking pages. Performing a specific search will provide you with the real reviews needed to choose the best payday loan company for your needs.
