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Things to take into consideration when choosing a payday loan provider

Hailey Avatar By: Hailey | Last updated February 14, 2019

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So you’ve decided to apply for a payday loan. It seem like the most short-term, easy and quick solution to your financial problems. The next thing you should do is a little research to make sure you choose a reliable and trustworthy lender. The market is flooded with lenders and payday brokers and not all of them are the real deal.

Here are some things to take into consideration before settling down for a certain payday loan provider:

  • Before applying for a loan, you should be aware of the fact that payday loans in general have very high interest rates, which is not exactly good news, considering that you have to repay the loan in a matter of weeks. Failing to pay in time will only cause even more problems, so think about that before making a move
  • When researching for a reputable company, carefully investigate its website. If the site looks suspicious in any way, it is full of grammar or spelling errors for instance, click away. A reputable provider won’t present itself in that manner.
  • Make sure the lender is authorized. The company should also comply to the FCA (Financial Conduct Authority) regulations and warn you on its website about the risks of not paying your debt in time
  • It is very important to find a valid phone number and postal address for that specific company
  • Make sure the provider you’ve chosen is transparent about its interest rates and any other fees. If they are not clearly disclosed to you, walk away
  • Any lenders that want to operate legally have to have a valid license that shows the provider has been subjected to examination by the state regulators. Find out their license number and make sure that everything is in check before you go any further
  • Don’t go for lenders that try to get you to apply for multiple loans and break down your loan into smaller ones, so they can avoid the state law which sets certain limitations on the amount you can borrow. For example, if a certain state imposes a limit of $300, some lenders may try to convince you to get 4 loans of $150 at once. This way you can also get more money and they trick the law and can apply more fees to their advantage. Try not to fall for that
  • Carefully read the agreement and terms before signing anything. Don’t be embarrassed to ask about any aspects or terms that you don’t understand. Better safe than sorry
  • Be careful about automatic extensions. Some lenders automatically extend the deadline for your repayment, if you fail to pay in time. While that might seem like an advantage at first, especially if you know you have money problems and maybe can’t pay in time, this will only hurt you on the long run because the interest will accumulate and you’ll end up paying way more in the end. Avoid these refinancing practices and get well informed before you agree on anything.