If you urgently need money and you’re running out of possible solutions, a payday loan can ease your worries. These types of loans are available online and offline, and anyone with a consistent source of income and an acceptable monthly income can apply. You may not think about a payday loan until you’re in the middle of a financial crisis. And unfortunately, being in the middle of a crisis can cloud your good judgement.
Regardless of what’s going on in your life, it’s imperative that you apply for payday loans with care. There is no denying the usefulness of these short-term loans. Plus, many other lenders will not extend loans with no credit check or collateral.
If you’re thinking about a quick cash loan, here are a few tips to ensure a safe experience.
Don’t take out a payday loan for luxuries.
The simplicity and quickness of payday loans might compel you to borrow money for luxuries, such as a flat screen television or another electronic device. Fight this urge and only apply for a loan when absolutely necessary. There is nothing cheap about payday loans. It doesn’t make sense to take out a loan and pay fees to buy an item that can wait until your next payday. Good uses for cash advances include a utility bill, medical bills or another unexpected expense.
Borrow only what you need.
Greediness can create a payday loan nightmare. Even if a payday lender says you’re eligible for a larger loan, this isn’t a valid reason to borrow unnecessarily. This creates a bigger debt and increases your risk of default. Borrow the least amount possible and only what you can afford to pay back by your next paycheck.
Contact the Better Business Bureau.
With so many payday loan companies, identifying a reputable company can be tricky. Do your homework and only work with companies that have a good reputation. Request referrals from others or check the Better Business Bureau for complaints against a particular company. You can also research complaints online. If any consumer was scammed or dealt with other issues, you’re likely to find this information online or at the BBB.
Compare rates and shop around.
If you’ve never applied for a payday loan, you might be unaware of typical loan fees. This is an easy way to pay more than necessary for your loan. Never apply for a loan without first inquiring about the fee. It also helps to check with other loan companies to compare terms and fees. One loan company may charge $30 per $100, whereas another loan company charges $20 per $100. The fee directly affects your balance due, and if you want to keep the loan affordable, you need the lowest costs.
Review the terms before signing.
The loan agent may verbally highlight the terms of the agreement. Make sure that these terms are included in your agreement before signing for the loan. Confirm the loan amount, the loan fee, the due date and the late penalty.