The internet is currently littered with an overwhelming number of payday loan lenders. Although this gives the borrowers an opportunity to choose from a larger choice, it also poses a threat when it comes to selecting the best.
This is because the same internet is still filled with quakes whose main aim is prey on the borrowers hard earned cash, then disappear without a trace once their mission is completed.
To help you select a trusted lender, below is a comprehensive view of the main things that you should consider before you choose a payday loan lender.
Check the Interest Rates For the Loans
You will find out that different payday loan lenders charge different interest rates for the same loan amount. While some of them charge a reasonable rate of around 10%, others go as high as 55%. For your safety, stay away from the lenders whose interests are very high.
Also, take it as a red flag for the lenders who don’t want to disclose their interest rates before you take the loan. It’s your right to have a look at all the charges that you will incur so that you can decide whether to take or leave the loan.
Understand the Payday Loan Terms Which Lenders Offer
Carry out detailed research on the terms and conditions provided by payday loan lenders. For instance, some lenders require the borrower to keep paying equal amounts up to the end without fail, while others offer some flexible terms. Always look for the options which offer flexible payments terms.
Compliance With the Laws and Regulations
This is the leading benchmark of separating between the fake and the legit lenders. The APRs provided by the legit lenders will always be in compliance with the legal status of the payday loans by state.
Also, even if the company is legit, don’t take any amount that you are not comfortable with. Most lenders will ask you to take large loan amounts, but you should be extremely careful about this since its only benefits them, and not you.
This is another crucial consideration. Does the online payday lender you want to work with has customer support portal? A genuine provider cannot fail to have this section. The customer portal allows the clients to express their opinions and complaints.
Ensure That the Lender’s Website Has All the Necessary Features
Practical Insights for Payday Loans
Assuming that you have now selected the best payday lender to work with, follow these insights to ensure that the entire process is safe for you.
- Ask yourself whether you should take the loan or not.
Payday loan lenders approve the loans quickly and release the funds easily too. Don’t let this tempt you to get the loan. Opt for a payday loan only if you have an emergency situation.
- Don’t get more than one payday loan.
Some borrowers think that it’s a good idea to refinance their initial loan using others. This is however not recommendable as it can significantly sink you into deep financial troubles considering that payday loans have high-interest rates.
- Use a financing calculator.
Know what you can realistically afford by using a financial calculator. Make sure you do this before you take the loan. The calculator will help you to budget well for your repayments.
- Negotiate on the interest rates.
Find out if your lender can reduce the interest rate for you before you take the loan.
- Avoid the long term loans.
If possible, look for the lenders who opt over shorter payment terms.
The importance of a payday loan cannot be undermined. However, there exist many scammers in the market, and this means that borrowers must be extremely careful when choosing whom to work with. Follow the above-discussed guidelines, and you will have a smooth time applying for your payday loan and returning it.