The US payday loan industry first surfaced during the eighties and kept growing ever since. Nowadays, countless such loans are issued every single day and are used by people that need some quick cash.
The problem is that most people do not know much about payday loans. They have no idea if they go on their credit reports and do not understand that some of the lenders can only be described as being predatory.
Statistics show that around 20 percent of the US payday loan lenders are scams. Some are so well-created that people end up sending money and then never get a loan. Others are simpler and rely on contracts that force borrowers to pay a lot more than what is initially disclosed. With all this in mind, it is really important to choose an honest payday loan lender. The tips below allow you to do exactly that.
First Thing First
The very first thing you need to do is to figure out exactly how much money you really need. This is because when you receive more money, interest is higher. The money that you pay back is more. You should only take out a payday loan when you need it and for an amount that is only as much as necessary. Do the math and be extremely careful with this. This can even tell you if you need something more, like a long-term loan.
Only Work With Certified Lenders
Never consider a payday loan from an unauthorized or uncertified lender. You want to check the website of the payday lenders considered. Certification details need to be presented and easily accessible. If you do not see any sign of certification, conduct a small research and see if the company is actually registered and licensed. When there is no certification in place, it is better to contact the police than to get a payday loan from the lender.
Be Informed About Local Laws
Every single country has specific laws and regulations that apply to payday loans. You have to be familiar with all limitations and laws that are levied by payday loan companies, based on where you live. You can thus learn about fixed and maximum interest rates and you can instantly spot the lenders that try to take advantage of your lack of knowledge by forcing you to pay higher interest.
Transparency Is Important
The transparent companies are always going to last longer than those that are not. When referring to lenders, this means that a transparent company will never overcharge customers or impose hidden fees. Every single bit of really important information is presented on the website and up-front before the loan is offered. This includes late charges, interest rates and much more. When you see that such important information is not presented, it is better to look somewhere else.
Speed Of Response
Last but not least, when you deal with a serious payday lender, how fast responses come to your questions is a sign of a serious operation. Make sure that the company can be contacted in many different ways, including email and phone calls. The way in which the customer care department talks with customers is a great way to assess how good a lender is.