There aren’t many people who aren’t suffering through the current financial crisis. You may be just about making ends meet when an emergency situation arises and you need cash – fast. You have several options that you can look at to help you out, payday loans are just one of them. If you are thinking about taking out a payday loan, there are some things you need to know first.
- First, payday loans are very expensive and attract extremely high interest rates, fees and penalties. Being even one day late paying back the loan will cost you dearly, as will having the repayment check returned by your bank.
- When you fill out your application do not tell any lies on it. You will be found out and you could be prosecuted for fraud. This will affect your chances of gaining any type of credit in the future.
- Payday lenders rarely carry out credit checks but they will need information from you that can be verified. You must have a steady income and you must have a proper bank account into which your salary is paid.
- Make sure that this is the option you want to take. See if you can’t solve the problem another way first and make this your absolute last resort. Try your bank. It will take longer to process a loan this way but it will be a whole lot cheaper.
- Do your homework. Don’t go with the first lender you see as you will probably get a better deal elsewhere. Make sure the lender you choose is reputable and is allowed to operate in the State you live in.
- Do not even consider a payday loan if you are not sure you can pay it back by the due date. Penalties and late payment fees will cost you a lot more money making it even more difficult to pay the loan back.
- Do not take out a payday loan to pay back another one, or pay off some other sort of debt – these are only short term loans that are designed for emergencies.
- Make sure that the interest rate you are paying is stated on the loan terms. If it does, it’s perfectly legal. If however, you find you are being charged a different rate this is illegal and you will have some recourse against the company.
We have tried to give you as much information as possible about payday loans. It cannot be said enough that if you are not 100% certain that this is the right solution do not apply for one. Once you start the process you are committed and fees are incurred.
One last piece of advice – if the company you choose cannot approve your loan application straightaway then go on to another one. We live in such a high-tech digital world that they can make a decision on the spot; if they can’t they are a little bit too far behind the times and this could indicate trouble ahead.