Every year, payday loans act as an emergency financial aid for more than 10 million Americans. On the other hand, many fall into the debt cycle, doing wrong financial actions. To avoid payday loan mistakes, you should follow several rules.
There are both dishonest lenders who use fraudulent schemes, and strict conditions of loans to paycheck, which do not allow breaking out of the vicious circle of debts. We will tell you in this article how to learn to distinguish good lenders from scammers. Read on and stay alert.
What are the payday loans?
When you urgently need money, you can’t pay due attention to all the subtleties and not even notice frankly fraudulent schemes. But for starters, let’s see what kind of payday loans are. Understanding this, you will be able to increase your chances of approving your loan, as well as avoid rogues.
When you urgently need a small amount of money that you can cover one-time from your next paycheck, you can take a short-term loan, which usually does not require a credit check. Such loans can be called advances until your next payday, only you have to pay the interest rate for it to the lender.
When everything is in order, you just extinguish this loan to payday from your next paycheck. It often happens that people literally lack a few days to pay off some of their bills or pay off a loan. This is where loans to payday come to the rescue.
Usually they are paid from your next payday and have a period from a week to a month, although there are also various variations. Mainly, it is necessary to take into account very high annual interest rates, which can reach 500% per annum, but taking into account the brevity of their term, the amounts are quite reasonable, despite the fact that the requirements remain minimal.
Scams are possible
The documents you sign can contain many items, especially footnotes in small print, which can put you in an unenviable position. Always carefully read all the clauses in the contract, and be attentive to all footnotes to what is written in fine print.
Especially pay attention to the numbers, which can tell you a lot about how much you will have to pay in the end. Interest rate and other payments, penalties for overdue payments will also be imposed on monthly or one-time payments, which is very important to understand.
You may be called by agents of lenders who offer a payday loan, but it is worthwhile to be on your guard in such a case, because usually people are looking for those who need financial support, and not vice versa.
The same applies to e-mails. Although e-mail can be just promotion, but nevertheless, you must be careful and not follow unclear external links, especially if you have not had any business with this company before.
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Fake Debt Collectors
Such situations are not rare now, when collectors require other people’s debts from some people, or even nonexistent debts at all. Such telephone calls should be interrupted if this was an isolated case. If such calls begin to repeat, then contact the police. In any case, never to anyone unknown to you, do not distribute your personal data and especially your secret credit card information.
This type of phone call can be intimidating, even if you know that you do not have notice of collection or overdue bills. If you got one, hang up. This is a scam from someone who is trying to take your money.
You can be calm about the fact that there are now many options for protection against credit fraud before payday and therefore avoid payday loan mistakes simply enough, the main thing is to be vigilant and not a single detail will escape you that could let you down.
You must carefully check everything so that you are not trapped by dishonest creditors. As in the case of any other loans, always compare the interest rates of lenders and do not trust too low and too attractive.
Look at the reviews of the lender, check all his documents, a license to work in your state and all other documents that will be available to you. Do not miss any legal details that may relate to your contract with this company and your money.
What to look for first when requesting a payday loan
Now you know what to look for in order to avoid payday loan mistakes, but what should you choose to get what you need? How do you choose the best option from the set?
Always carefully study your agreement with the lender in order to fully understand all possible fines and payments, so that there will be no unpleasant surprises for you. A credit company must have a good and active support service, which will always be able to answer your questions.
When you choose the best offer from the lenders for your circumstances, do not forget to check the selected lender in all the specified parameters so that you can be sure that you are making the right choice, which most likely will not give you any unpleasant surprises.
Look for lenders for a payday loan on the parameters that we have described here. In addition, do not forget that lenders also impose their requirements on borrowers, so do not forget to take care of compliance with them.
Also you must have a good reason to use this type of loan, because it is one of the most expensive loan products.
Here we introduced you to the most opportunities to avoid payday loan mistakes when you urgently need money before your paycheck. Knowing these simple rules, you can protect yourself and your money from getting into unpleasant situations and from loss.
To get financial support until the next payday, use the loan application form on our website. Provide all the required information and you will learn about all the features that are now available to you. You can also read our financial blog to keep abreast of events and understand how best and how to properly handle your personal finances.