Many lending companies today cater to the bad credit market.
Loans come in different forms, depending on the prerequisites and the repayment period. One type of financing that is popular in the market today is called payday loan or loans which are payable at the end of the month or on the next pay check.
Payday loans are quick to process and they come in handy during times of emergencies.
Are you thinking of getting this type of loan? Before you do, check out the following payday loan tips to avoid unnecessary problems:
Know your purpose.
Why do you need a payday loan? Is it really an emergency? While the process is simple, payday loans generally come with high interest rates and failing pay it back on time could lead to a serious debt problem.
Look for other options.
Do you have other options aside from borrowing from a payday loan lender? Can you borrow from a friend or a relative instead? Or do you have personal belongings that you can sell to get the cash you need? See to it that you understand the pros and cons of a payday loan if no other alternative is available.
Check the lender’s reputation.
Not all payday loan offers in the market are genuine. Some payday lending companies impose excessive rates and fees. In fact, you might even come across illegal payday loan lenders. To avoid being ripped-off, check the company’s track record from the BBB (Better Business Bureau) and make sure that the lender complies with lending laws of your State.
Watch out for hidden costs.
Before signing up the contract, make sure that there are no hidden fees or unexplained charges. Some lenders may convince you to sign the contract without reading the terms or without revealing all the fees you will pay.
Examine the fine print.
NO matter how inconvenient it is to read the Terms and Conditions, it is the only way you can be sure that you are making the right choice. Study each statement carefully. Pay attention to details, particularly to the fees. Know the lender’s policies and if your contract contains blank lines or spaces in between the words, do not sign it, since statements or words can easily be added after you signed up the document.
It is crucial to submit your payment on time. Putting off your payment for one or two months can instantly put you in a bad credit situation. The longer you put off payment of your payday loan, the more you pay on the interest rate and the more difficult it would be to get out of debt.