Payday Loan Tips for Borrowers in Need
Many lending companies today offer financial assistance to borrowers in need. Loans vary depending on
the lender’s requirements and the length of the repayment term. A payday loan is a type of an
unsecured loan which has a short repayment period. It is called payday loan because repayment is
expected to be submitted by the end of the month or when the borrower receives his/her pay check.
Are you thinking about acquiring a payday loan any time soon? If yes, then this article was written for
you. To avoid making a wrong decision, consider the following advice before applying for a payday loan:
Know your purpose. Do you really need to take out a payday loan? What do you plan to do with the
money? Is it really that important? Payday loans are generally quick and easy to acquire but it doesn’t
mean that there are no risks involved. Despite the easy process, payday loans often have high interest
rates and failing to submit payment on time could become a serious problem.
Look for other options. If you really need money at this time, have you considered other possible
options aside from a payday loan? For instance, do you have a friend or relative from whom you can
borrow cash? Can you sell a personal belonging to produce cash? Weigh the pros and cons of acquiring a
payday loan and consider alternatives first before deciding that a payday loan is the most viable solution
to your financial problem.
Check the lender’s reputation. Not all lenders that offer payday loans in the market can be trusted. You
need to make sure that a prospective lender abides by the lending laws of your State. Since the specific
laws vary from State to State, you should also be aware about the lending laws that apply to your own
State. Check the lender’s background from the BBB (Better Business Bureau) and make sure that there
are no cases of fraud filed against the company.
Watch out for hidden costs. Some payday loan lenders may try to make profit out of the expense of
their borrowers by not revealing all the fees. After signing up for the loan, you might be surprised to
find out other fees that you need to pay aside from the interest rate.
Examine the fine print. Do not let the small text or the length of the document discourage you from
examining the Terms and Conditions. Read each and every statement. Scrutinize details. Understand
the lender’s policy, the rules, and the costs. If there are blank spaces in the contract or if there are
statements that seem vague do not sign up the document. Instead, do further research to make sure
that you are not being ripped-off by your chosen lender.
Plan repayment. Missing your payday loan payments for two or three consecutive months can instantly
put you in a bad credit situation. Before you know it, you could be stuck in bad debt and repayment can
prove to be a burden. It’s important to be able to submit your payment on or before the due date to
avoid incurring increased rates and late penalty fees.
About the Author
Shelly Evans is a freelance writer and loan consultant. The website
http://www.badcreditresources.com offers resources that specialize in providing bad credit loans
and bad credit cards to people with bad credit.
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