Payday Loan Tips and Tricks

We should all remember about the emergency possibility and open saving account to prevent financial obstacles. However, not all people are able to save for rainy days and have to seek for short term finance. This is a very serious decision that affects your future well-being. The terms of different payday loan shops differ considerably thus either contributing to easier repayment of the debt or making it more complicated. The task of the consumer is to find the option with terms that can be easily fulfilled.

Tip #1: Don’t Take Payday Loan Until You Really Need It.

It’s difficult to understand for a beginning borrower when payday loans online is a wise decision when this type of credit should be avoided. The consumers should clearly see the difference between different situations. It’s simple to understand when you analyze the state of affairs of some other person and harder when monetary obstacles arise in your life and you are involved into it. For instance, the beloved person is ill and you worry a lot.

The person tends to make decision about the loan based on emotions during cash crunch. Such way leads to nowhere. As a result, the person often finds himself stuck in a tangle of monetary problems. Avoid bad debts. Payday loan is a high interest debt that should not be taken unless something really bad happens that requires urgent investment.

Never borrow payday loan to solve your long term financial problems.

Those who do it, finally get into bigger trouble than they were prior to borrowing.

Tip #2: Find Out Your Credit Score.

Though the payday lenders often don’t check the credit history, sometimes it can be done, especially when suspicion arises concerning this or that applicant. Therefore, it’s worth checking the credit history to learn your credit rating. With good credit score the chances of getting credit considerably increase. The person can even apply to the bank if there’s enough time for it.

The person can check the credit score at one of the main credit bureaus or use the free resources providing this information. The person should make sure that all data there is accurate and complete.

Tip #3: Don’t Take Out The First Payday Loan You Come Across.

Payday loan is a very popular type of credit therefore there are numerous offers on the market. According to the statistics 80% of Americans owe debts and need to repay them monthly. Many payday loan shops were created to meet consumers’ demands. Take advantage of this extensive selection and find a highly-reputed lender.

Shopping around can be helpful to find the best deal. Don’t take out the first payday loan you come across.

Sometimes people don’t pay attention to slight difference in figures but when the fee is calculated it makes a huge difference. Check out different payday lending companies and compare the rates. It’ll help you to find the best deal. The search of this kind is time-consuming but the result is worth it taking into account how high the fee can rise. The fee varies depending upon the state where you live.

Look at the example below:

example of payday loan rates
Pay attention to APR of the loan or annual percentage interest rate. (ARP by States look at this table)

Tip #4: Use The Comparison Tools and Sites.

It can be challenging to see which offer is the best among numerous services. The consumers are often confused about the real cost of the deal therefore they make wrong decisions. Resort to rates comparison tools to alleviate this task. Compare the rates using special websites that offer comparison of prices. The person gets better vision then. Numerous price comparison sites provide clear information on the cost of borrowing.

These resources enable getting comprehensive view of the situation without hurting credit record as numerous applications to different payday loan companies can undermine it.

Tip #5: Don’t Borrow More That You Can Repay.

You’ll have to reimburse the borrowed amount on a due date. The lender will deduct the amount you owe along with the fee with the next paycheck received by you. Have you planned your future expenses with this factor in mind? There are many people living from paycheck to paycheck. This category of population may face cash problems and won’t cope with expenses next month. The payday loan is not recommended then. They should apply to social funds and governmental structures for help and benefits, not to lenders charging much for the services.

According to statistics, approximately 80% of people borrow repeatedly within a couple of weeks after they repay the previous payday loan. This proves the assumption that they can’t cope with the burden of debt.

It can be helpful to see the whole amount of the deal to make more rational decision. The person should understand the outcomes to borrow wisely. Interest is a significant factor and you should do everything to minimize it.

Tip #6: Study The Terms Thoroughly.

You should be aware of all details of the deal before signing the agreement. The burden of debt can be too heavy afterwards so everything should be clear to you in a contract. This is the responsibility of the lender to deliver the contract outlining the total cost of loan. If you don’t like some detail in a contract you are not obliged to sign the document.

Read the fine print on all documents you are planning to sign. It will help you not to get into financial trap signing the contract with unknown terms. There were a lot of cases when the consumers were desperate and signed deals with unfavorable terms just because they haven’t noticed them.

One of the points they should pay attention to is ACH authorization. Many customers sign this document without paying attention to the essence of it. However, this is a very important document. It gives the permission to withdraw money from your bank account. Make sure when you sign this form that you are aware of all details of the deal that you know how much will be debited to the bank account. Is the amount sufficient to cover your debt? You should also be aware of the capability to revoke the authorization.

Tip #7: Learn More About The Lending Company.

Learn more about the company and its reputation. The testimonials of customers can be very helpful in this case. But don’t rely on reviews on unknown people only. It’s recommended to check the lender’s license to operate in your state to make sure the work of the company is legal. Don’t share personal information online until you make sure it’s safe.

Tip #8: If The Expenditures are Not That Urgent Apply to The Bank First.

Consumers prefer to apply to payday lenders because they have more relaxed criteria in comparison with banks which check your trustworthiness thoroughly. In the fear of being rejected they don’t even try. Consider less pricy alternatives first and make attempt to borrow for lower fee if the circumstances allow that.

Tip #9: Do Not Borrow More Than You Need.

Most payday loans provide loans up to $1000. There are some of them who extend this limit to $1500. However, it doesn’t mean that you should take the whole amount. The fee will increase accordingly. Why should you pay extra cost? The expenditures are considerable!

Take out as much as you need – just to cover your current expenses. If you need just $200 or $300, there’s no point to borrow more than that.

Tip #10: Prepare The Pay Stubs To Show to The Lender to Get Qualified.

Though it’s considered that payday loan is easily obtained, the person should take measures to persuade the lender in his/her capability to repay. Therefore, it’s recommended to offer some proofs of your income at the lending shop. The person can present the pay stubs and a checking account not to let the lender worry about reimbursement on a due date. If you have any documents that prove your regular income, feel free to show them to the lender.

Tips to Follow When You Can’t Repay

Repayment procedure is very easy if you have enough funds for that. The typical payback time is approximately a couple of weeks. It should not exceed a month. If the circumstances are against you and can’t repay on the payment date, the loan can turn into a nightmare. When fees start adding up, this is not good for your budget.

It’s necessary to take measures before the due date arrives. Those who can’t come up with the cash to resolve the problem on a due date, should immediately contact the lender. Make a different repayment plan with a payday lender and follow it. Though rollover isn’t the best solution, it’s still better than a spoilt credit history.

What to Do in Case The Payday Loan isn’t Available?

There can be different solutions that enable people to cope with their financial obstacles without applying for payday loan. So the Pew specialists working within the frames of The Safe Small-Dollar Loans Research Project applied with this question to common people. The results they received were rather curious. Look at the picture below to make your conclusions.