At some time in their life, virtually everybody needs financial help of some sort. Payday loans can come in handy, especially in an emergency situation. However, you can be taken advantage of if you are not careful, by disreputable lenders. Use the tips in this article to avoid being used:
- Make sure you compare a variety of lenders. Don’t just look at interest rates; check out their fees and penalties as well. There are high street or online lenders to choose form but, if you go for an online one, do it over the phone.
- Research your choice of companies thoroughly. While most are OK there are always a few unscrupulous ones who just take advantage. This will get you into deeper debt and you will wind up owing far more than you ever thought possible. Try not to use a company who has not been in the business for at least 5 years. Use the internet and look for user reviews on companies; these can tell you a lot about the way a company operates.
- Do not use this loan to pay off another or use another to pay off this one. You can get yourself into deep trouble if you keep refinancing payday loans as the costs of doing so will be extremely prohibitive. If you can make the payment, talk to the lender.
- Payday loans are short term. You should make sure it is paid in full as quickly as possible. Monthly payments may be more affordable but you end up paying back a lot more than you need to so pay more than the minimum each month.
- Always read the small print and understand exactly what you are signing up for. Make sure you now the total amount to pay back, including all fees, interest and penalties, if any.
- Avoid payday loans unless it is an absolute dire emergency. Look for alternative methods first. Taking out a loan is fine if you can pay it back but it normally ends up in a vicious circle of borrowing more money to pay off debts.
- Payday lenders rarely run credit checks but they will need to verify who you are. Have all of your personal information to hand, a phone number for your employer and at least 3 references who can be contacted. You will also need an account with a recognized bank.
- Do not lie on your application form. You will get found out and you could face prosecution for fraud. This will also affect your ability to be able to borrow in the future.
- Mae sure you know exactly how much you need to borrow and stick to that amount. Any more and you could find yourself in trouble. Many companies will try to entice you take bigger loans, by making the terms more attractive. Stick to your guns and borrow only what is necessary.
Payday loans are designed for people with poor credit who can’t get help anywhere else. Providing you know exactly what you are doing and understand the complete terms of the loan you shouldn’t find yourself suffering any problems.