Payday Loans

A Checklist Before You Apply For A Payday Loan


A payday loan is a loan for a short length of time, which comes with high rates of interest and a whole lot of risk. Thinking about payday loan alternatives is one way to lower the risk as well as is doing business with lending companies that are approved and licensed by the state. In this article, we will look at some of the things you can do in order to protect yourself from hazards of inconsiderate money borrowing .

The Basics Of Safe Payday Lending

It is good practice not to enter into any sort of financial agreement without first understanding the deal in as much detail as you can. Make sure that you read all of the terms and conditions and scrutinize any small print. If you are still unsure as to any aspects of the agreement, then contact the lending company and ask them to go through it with you. If their contact details are not on their website, then look for a different lending company. Any good lending company would list their contact details.

Figure Out The Annual Percentage Rate

For those that do not know, the Annual Percentage Rate or APR is the amount of interest that has to be paid on a loan, shown as a simple yearly percentage. This allows people who are looking for a loan to see clearly which lending company is offering the best and most competitive rates of interest.

As an example, a loan of $100 with a $20 charge and a repayment length of 2 weeks does not have an interest rate of 20%. It has an APR of 521.42%, and that is not the highest APR you will ever see when looking for a loan that needs to be repaid in a short period of time. Make sure that a lending company that you are planning to borrow from displays their APR on their website, and avoid lenders that display no such information.

Get To Understand The Payday Loan And Rejected Check Regulations For Your State

Getting to know the loan rules and regulations for where you live can help you to spot payday lending companies that may be less than reputable. There is also the chance that some payday lending companies will threaten you with legal action should you fail to make a payment on time. By understanding the state laws with regards to rejected check, it will be easier for you to discover if this is an empty threat or not.

Above all, remember and understand that payday loans should only really be used in a real financial emergency and it should be your last refuge after trying all other options.

Those are the basics of payday loans. In the next part of the article, we will look at a few more steps you need to take prior to filing an application.

Make Sure That You Have A Plan

Prior to applying for a payday loan, make sure that you have a plan in mind to help you with a number of things, such as when you are going to be paying back the loan, plus the interest and other charges. Then you will need to make plans for the following month. This is due to the fact that you are going to have much less cash at your disposal from that month’s paycheck. If you do not have a plan, then you may want to think again with regards to applying for a payday loan because if you just blindly sign up for one, then you could be putting yourself at risk of ending up in a cycle of debt.

Try To Locate A Licensed Lender

As we touched on briefly, it is important that you find a payday loan company which has lenderbeen approved by the state as there are many payday lenders out there that look legitimate but who only really want to get their hands on your personal details, and especially your bank and charge card data. If this happens, you would be in way more trouble than you started with.

Going to a lending company’s store in person is much safer than looking for a lending company online, although this too can be fraught with danger. Do not assume that just because a company has a store on your street, they are legitimate.

Searching The Internet For A Payday Loan Company

If you must look for a payday loans company via the internet, and in most cases you are likely to be using a search engine, then it is a good idea to steer clear of sponsored links. The majority of search engines display their results in an order, which is based on a number of different criteria, such as the length of time that the site has been live, whether it has original content and the code quality. However, sponsored links are just ones that have been paid to be there, and you may end up dealing with a lending company that is just a front for criminals to steal your personal data. It should be your number one priority to avoid these scams.

Make Sure That You Check The Price

A good payday loans company will be honest with regards to their pricing structure. It is not advisable to sign up with a company that tries to hide away their prices. If any payday loan company websites try to get you to register or even put in an application prior to them informing you of their prices, then make sure you leave and find another site.

Find Out If It Is Easy To Contact Them

One of the most basic prerequisites for an online payday loans company is that their contact info should be found without too much trouble. The very least you can expect from their website is that they have listed their name, the address of their office, a telephone number (if it is toll free then it is even better) and an email address. If you find a payday lender that has no contact information on their website, then be more than just a little suspicious, as they could very well be a rogue site, one that is only interested in helping themselves to your personal info and banking data.

checklistCheck For A State License

As soon as you have the contact details for the lending company, then an additional check you can make is to find out whether the company is fully licensed and bonded by the state, as this will act as a guarantee that they are not just a fake company looking to secure bank and charge card details of unsuspecting victims.

Other Checks You Can Carry Out

If you really want to make sure that you are dealing with a legitimate lender, then you can also look at checking out the domain name of the website of the company on the Whois website. This website will allow you to see if the website registration details match that of the lending company. If it is either set to private or it comes up as registered to an individual and not a company, then you might not be dealing with a reputable lender.

Discover If Your Personal Data Will Be Safe With Them

Any website where you are expected to send personal data, such as social security numbers, names and addresses and most important of all, bank or charge card details, must have a certain level of encryption. The most well used method of encryption is known as Secure Socket Layer or SSL, and this helps to secure data that is sent via the internet. There is a simple check that you can carry out in order to discover whether a website uses SSL encryption, and that is to take a closer look at the URL of the webpage. Any webpage URL that begins with http:// does not have SSL encryption. If the URL starts with https://, then it uses SSL. Also, on some web browsers, you may notice a padlock symbol next to the URL and this also signifies that the webpage is secure.

Remember To Keep Your Computer Secure

Although it is important to only pass on sensitive and confidential information via a website that has the necessary security protocols, if your own computer security has become compromised, then there is still a high risk that your data can be stolen. So again, if you are really concerned about just how secure your personal information is, then it might be in your best interests to go to a payday loan company store instead. Even though a website is encrypted, there is still no guarantee of security. Using an unsecured website is almost an open invitation for thieves to take your personal info and to use it to steel your identity.

Make Phone Contact With The Lender In Order To Ask Questions

So, after you have collected as much information as you can with regards to the contact details of the lending company, their prices, their APR and the fine print that comes with the loan agreement, the final step you need to take is to contact them via the telephone. That way you can get some direct answers to any queries you might have, as well as knowing that you can speak to a real person, rather than just using the lending company’s website.

Plus, you will also be able to gauge the level of customer service that they provide, as well as getting some idea as to how helpful they are likely to be if a problem arises. If it is difficult to contact them before you take on one of their loans, then it is likely to be even more difficult to contact them if and when there is a problem that you need to discuss when you already have a loan with them.

In Summary

It is important that you take your time when you first think about getting a payday loan. Although this is not always possible, by taking the time to do some basic checks, you could be saving yourself from a whole lot of hassle later on.