A fair number of
individuals do not trust lenders that tack on excessive interest rates. The
thing about payday loans is that they do have high interest rate. You are going
to want to take note of that. The following tips can give you guidance on
protecting yourself whenever you need to take out a payday loan.
Never take out a loan
for more money than you can reasonably pay back with your paycheck. There are
many lenders that tend to offer more than what you're asking since you'll
struggle to pay them right away. That means that can harvest more fees from you
when you roll over the loan.
Prior to agreeing to a
payday loan, it is important that you aware of and agree to all the terms. Even
if you need the money badly, you need to know what you are getting into, and
make sure you are not falling for a scam.
Try and pay off your
loan as quick as possible. Paying in installments might be convenient, but
you'll be paying huge fees for the privilege. A good way to pay it down fast is
to pay back more than you owe each month.
Prior to agreeing to
any loan, read the contract thoroughly. Some companies are phonies and are only
after stealing your money.
Make sure you're
dealing with a reputable lender prior to submitting any information about
yourself. Look at reviews online to see what previous borrowers have said. Make
sure the privacy policy is available to you.
For those considering
payday loans, make sure you know when you plan to repay it. The interest rates
on these types of loans is very high and if you do not pay them back promptly,
you will incur additional and significant costs.
Beware of any company
that wants to roll finance charges to the next pay period. When this happens,
your money may all be going to the fees and not to the actual loan. You could
wind up paying way more money on the loan than you actually need to.
The local Better
Business Bureau can give you information about payday loan companies, customer
complaints and how those complaints were handled. There are lots of scammers
out there who want to prey on the vulnerable. Always make sure you are dealing
with a legitimate and reputable company.
Remember that payday
loan APRs regularly exceed 600%. The interest rate will vary by state. Just
because you do not see that particular number in your contract does not mean
your payday lender is not that high. This might be contained in your contract.
If your payday lender
is located far away, make sure they do not require documents to be faxed. Some
lenders want you to fax documents, which is a hassle for many people because
they do not have fax machine access. Faxing can easily cost a dollar or more
for each page that is faxed.
Many times a more
affordable option to taking a payday loan is to get a cash advance at your job.
Some employers allow paycheck advances, and that can save you a lot of money
and future headaches. Always try this prior to applying for a loan.
Try to get a payday
loan over the phone. While applying online may seem easy, it is usually better
to call for more information. Not only can you ask any questions you have, you
can also make sure you understand all the terms and conditions of the loan.
Those aiming to apply
for payday loans should keep in mind that this should only be done when all
other options have been exhausted. Payday loans have extremely high interest
rates that can have you paying up to 25% of your initial loan. Look into any
other options you may have before applying for payday loans.
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