Before you take advantage of a payday loan, you must be able to recognize the signs of a truly good overall deal. These loans can be incredibly useful when you are struggling financially, but you don’t want to rush into getting one. The more cautious you are, the less likely you will be to encounter any problems. There are certain things that you need to look for in a payday loan before you make a commitment.
No Additional Fees
One of the many signs of a good payday loan is that there are no additional fees you’ll be required to pay as well as being able to get cash immediately. Despite what you might have been told, not all private lenders charge a bunch of fees on their loans. In fact, most of these companies have a policy that forbids this altogether. You will have to pay interest on the money you borrow, but that should be all. If you see an “origination fee” in the loan contract, start looking for another lender to apply with.
Two Week Term
The average term of a payday loan is two weeks, and it is the best length of time for most borrowing amounts. This allows you to pay back what you borrow with your next paycheque. It will also prevent you from paying more interest than you have to. The fact is that while a longer term might seem better, it will end up costing you a lot more overall.
Some private lenders charge higher interest rates than others on their loans. This is precisely why it is such a good idea to compare rates from a number of these lenders. You will end up getting the loan you need without having to pay more than necessary in the end. A low interest rate is definitely important, but it might take a little while to find. The research you do will ultimately help you save a lot of money.
Extension for Late Payment
While nobody plans to pay back their loan late, it is always good to know that you can if necessary. When you are looking through the loan contract, you should see if it says anything about late payment being accepted.
Quite a few private lenders are willing to give borrowers an extension on their loan if they are unable to pay it back on time. You will probably have to pay additional fees, but it could be worth it. You should inquire as to how much time you would have. Some lenders might give you an extra three days while others will give you a full week to pay the full payment.
A lot of payday loan lenders offer automatic repayment, which is basically when they take the money you owe them from your bank account on the due date. This saves you the trouble of having to make the payment manually. You also won’t have to deal with the consequences of forgetting to pay back your loan on time. If you are confident that you will have enough money in your account to cover the loan, this is something to consider.
Easy to Understand Language
When you are looking at the loan contract that the lender gives you to sign, it should be fairly easy to understand. You shouldn’t need a lawyer to explain anything in this document. If you have a hard time understanding every other thing, it might be because the lender wants to confuse you. It’s never a good idea to get a loan if you don’t understand all of the terms completely. If there is anything you are unclear about, you should ask the lender. If the entire document is written in complicated legalese, you should find a different lender immediately.
Believe it or not, the lender running a check on your credit is actually a good thing. This tells you that they are most likely legitimate. You should never trust a lender that claims they don’t run credit checks. It is also important to remember that your credit is just one of several factors the lender considers before making a decision on your application. You certainly don’t need to have a high credit score to get a payday loan.
Those who are able to recognize the signs of a good payday loan will be able to get the money they need with minimal strings attached. This is definitely something that you want to take your time with, because rushing through can have major consequences. You need to keep these things in mind before accepting a certain loan offer. Some people get so excited about being approved that they neglect to actually look at the loan itself. If you want a great deal on your loan, you need to use this information to your advantage.