One in three college-aged Americans considers taking out a payday loan. Whether you are college-aged or older, a payday loan can help you when you have a sudden emergency expense.
The trick to making this loan a successful one is to choose the right lender. You need to find a payday loan lender that can meet your unique needs.
Here are five things to look for, so you make the right choice.
Be sure to ask about all of the fees that they charge. Lenders are legally required to be transparent about their fees. If the lender doesn’t seem upfront, then this is a sign you shouldn’t work with them.
Once you have all of the information about the fees, you need to decide if you can afford the fees. Be sure to thoroughly read your loan contract and make sure that the fees you were told are the fees listed. This way, there are no surprises later on.
2. No Money Upfront
A reputable lender will never ask for money from you upfront. The origination fees will be paid out of your loan amount. This means you will need to borrow more than you need to cover these fees.
Choose a lender whose fees are within a range you can afford.
3. Other Terms
You need to analyze more than just the fees. You need to consider the lender’s other terms and conditions. This includes when your loan comes due.
Payday loans can have a payment period as short as 15 days, or be as long as 90 days. You need to consider your capacity to pay to determine which repayment period is right for you.
While you should only take out a loan if you are confident that you can pay it back, sometimes things happen. Find out what the lender’s terms are if you can’t pay back your loan.
4. Are They Reputable
You should only borrow money from a reputable lender. Make sure the lender is licensed to practice in your state. Some states have made payday loans illegal, such as Florida and Massachusetts.
While you are checking their legitimacy, you should also check their reputation. Ask friends and family if they have used the company. Find out how their experience went.
You can also check online for reviews. You want to make sure the company has a history of excellent customer service.
5. Take Your Time
Never rush your decision. The worst choices are made when you are emotional and in a hurry. So slow down, put your emotions aside, and focus on the facts of the lender and the loans they have available.
Choose Your Payday Loan Lender
By using these four tips, you can be sure to pick the right payday loan lender. You’ll pick one that is reputable, will treat you right, and has the terms and fees that work for your financial situation.
Find out how a payday loan could save you from overdraft fees.