It happens to us all: Even if you try to manage your money well, emergencies like a broken down car or surprise medical bill still happen. In those cases, taking out a same day payday loan can seem like a good idea to help you through your next paycheck.
The good news is that finding a payday loan company is as simple as doing a web search. The bad news is that having so many options can make it hard to determine which companies are real.
Of course, you’ll want to do research on the lender’s reputation so you don’t get scammed. However, you also have to watch out for more subtle signs that the lender may not be safe to use.
Check out these seven qualities that make a payday loan company legit.
1. The Lender Will Be Licensed in Your State
Before you try taking out a payday loan, you should check if the payday loan company actually has a license to operate in your state. In fact, some states have actually banned payday lending, while others restrict how much interest the companies can charge you. Online payday loan companies sometimes try to ignore these laws.
Therefore, you’ll first want to check your state’s laws to find out if payday loans no credit check are legal. Once you know that, you can visit your state’s department for financial institutions or lending businesses to run a search using the loan company’s name.
If the payday loan company doesn’t come up as licensed in your state, it’s not legit for you to use, so you should seek an alternative.
2. It Will Have Accreditation From the Better Business Bureau
If you’re wondering how to know if a payday loan company is legit, checking the Better Business Bureau website is a good next step. Simply enter the name of the instant approval payday loan company and select its location using the site’s search tool.
Beware if the payday lender’s name doesn’t show up in the search results at all. This indicates you probably should not trust the company with your finances.
If the company does show up, take a close look at it’s Better Business Bureau page to see reviews and complaints from other customers. If the company has a bad rating or complaints about people being scammed, this is another sign to steer clear of a lender that probably isn’t legit.
3. The Company Will Have Positive Reviews From Reputable Sources
A reputable payday loan company should have good reviews from actual customers and third-party agencies. Try searching for reviews of the payday lender’s name in your search engine and look closely at what other customers say. A high number of bad reviews will indicate the lender may not be legit.
Also, pay attention to the source of the review. Lenders may pay people to leave fake positive reviews to try to take advantage of others, so if all the reviews sound similar or make questionable claims, this may signal that the posters aren’t real customers.
Checking professional consumer protection sites like Consumer Affairs is a good idea to get a less biased and more reliable impression of the lender.
4. It Won’t Ask You for an Advance Payment
Some payday lenders will try to charge you a fee right away simply to apply for the guaranteed loan. This might indicate the site scams people out of money and may not even issue the loan you want approved for.
At the same time, watch out for payday lenders that ask you to pay processing fees or insurance fees as an upfront payment. While it’s true you might have to have such costs added to your payday loan, a reputable lender won’t ask for it before you even have an approval in hand.
If the payday loan company asks you to send them some money through Western Union or some other transfer service, walk away immediately. This common scam indicates an illegitimate lender.
5. It Doesn’t Hide Fees and Interest Charges From Borrowers
When a payday loan company is legit, it will give you a document showing all the terms and conditions of your bad credit loan. You’ll know how much interest you must pay, how long you have to pay the payday loan back and what the overall cost of borrowing will be. You should also know any additional fees charged.
A payday lender likely is not legit if it refuses to tell you the terms of the loan. In fact, the company should display the loan terms before you even accept the loan. Otherwise, you might find the company charges extremely high rates and hides this information for a reason.
6. It Won’t Make You Feel Pressured
Some illegitimate payday lenders try to push you into applying for the loan immediately. Often, the lender will tell you that it has some limited time offer or that you’ll receive money back if you apply within a day or two.
This indicates that the lender probably cares more about its sales than it does about meeting its customers’ needs. It can also mean the company actually seeks to take advantage of desperate companies who need some money fast for an emergency.
When you chose a payday loan company, avoid one that offers such promotions. Instead, seek a lender that charges a stable rate based on a legitimate measure like your credit score.
7. It Will Have Verifiable Contact Information
If you come across a payday loan company that lists no physical address and only has an email address or contact form, turn away immediately. This can mean the company isn’t real or wants to otherwise hide its contact information in case you take legal action against it.
A legit payday loan company will have a physical address you can verify using multiple sources. For example, the lender’s address should come up in state business registries, online business listings and review sites.
Now You Know What Makes a Payday Loan Company Legit
With these seven qualities that make a payday loan company legit, you can begin searching for a no credit check loan lender that offers the best terms for you.
It pays to check with a few reputable lenders since fees and interest charges vary. You should be able to get a pre-qualification and see the potential loan terms without paying anything.
For your convenience, request a loan on our website today.
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