One of the most popular forms of short-term lending is payday loans. Although they may seem simple on the surface, there are some things you need to know before applying for a payday loan. This is what you need to know and ask your provider about payday loans before you sign the dotted line.
Overview Payday Loans
A payday loan allows you to receive a lump-sum amount of money or have it deposited in your account. You agree to have the money plus interest paid back by your next pay day. It’s basically an advance on your next pay date.
Because these lenders do not need to run traditional credit checks to approve you for these loans, they can also be called no credit check loans. To gain more information about your financial history, many lenders will use an alternate credit bureau. While this will not impact your credit score it could make you unqualified for a loan from the lender.
If you need money quickly and have an urgent situation, these loans are a great option. You should be eligible for a loan as long as you have a bank account, income proof, and current debt obligations that are manageable. Payday loans come with some risks because the interest rate is much higher than what you would get from a bank.
Who is the Lender?
When looking for a payday loan, it is important to be aware that there are many lenders. You can find state-licensed lenders who have been licensed by your state. They are also vetted and approved by your state regulators. Tribal lenders are licensed by other states and do not need to adhere to your state guidelines. A tribal lender will typically charge you a higher interest rate than a state licensed lender.
Most states restrict state-licensed lenders from granting loans more than one loan. This is to protect consumers. Tribal lenders can allow borrowers multiple loans from multiple lenders. Due to the high interest rates these products may carry, this practice could cause problems for borrowers. You should consider the cost of these loans in relation to the financial problem that you are currently facing.
A reputable lender will display their rates online or at the location. It is important to compare the costs of payday loans and the finance charges with other lenders. It is easiest to determine what your state allows for short-term loans. It is important to be aware of the legal guidelines in your state as they can differ widely.
A state-licensed provider is your best choice for financing because the loans offered by licensed lenders will have a legal interest rate. Tribal lenders are not bound by state laws and regulations about loan amount, interest rate, term, or number of loans outstanding at one time. Tribal payday loans are not regulated by the state, so they are not a popular loan option.
Many states offer repayment options to help you pay back your loan if you are unable to repay it by the due date. Each state has its own rules and options. It is important to understand your options.
Remember that a reliable payday loan provider will work with you to get your money back. To find out what your lender is willing to do for you if you are unable to pay the loan, contact them immediately. Trustworthy providers will help you because they value your business and won’t send you to collection.
Bottom line: Always do your research before you apply for a payday loan. Payday loans can be a great option for many people. If you’re a responsible borrower, they can help you solve your financial problems. Apply online for a payday loan if you are in dire need of cash.