There are thousands of customers are applying and getting short-term loans ever hour and when you check further then can easily see that the most popular among all of them are payday loans. These are quick way to get rid of financial emergencies. Due to high in demand, there are several offline as well as online companies are running their business by providing payday loans services.
Due to good number of payday lenders in this industry, it is pretty sure that there might be some phishing and scammers also that are doing unethical practices and cause loss to their customers. Due to those bad lenders, the whole payday loans industry get criticizes by several newspapers and local authorities as well. There are plenty of borrowers complained about bad experience with their payday lenders which is why it becomes very important to dig more in this topic by research and find a legal, reputable lender and also know your rights and responsibilities.
If you have not submitted your loan application to the lender then it is better to take some time and understand about how the loan works and what your available rights are. Nonetheless you should actually know the exact amount that you are going to repay at the time of the repayment.
Payday loans are credit agreements similar to other credit options like bank loans or credit cards with some practical differences. The advantages in payday loans include quick and easy process but the borrowers not totally understand that they are getting involved into a complete credit agreement. Choosing a payday loan without understanding its pro and cons is simply a big mistake and you should always go through the details of that loan program which you are willing to avail.
For your help, here are some set of questions that you should ask prior to apply for payday loans:
Question 1: What is the interest rate of the loan program and total cost of credit?
Answer: The rate of interest is directly proportional to the amount repayable for payday loan. The TCOC (Total Cost of Credit) is very important as it is the actual amount repayable.
Question 2: What are the Consumer’s rights?
Answer: Well this is a question whose answer can be different with respect to different lenders. Good lenders always understand consumer’s rights therefore they always provide the information on their website. If by any means they don’t have their business website then they will surely provide you other legal details like some links from where you can read all the terms and conditions regarding the loans.
Question 3: Does the lender Legal and reputed?
Answer: It is actually an important question and you must know its answer before you apply for the loan application. You should check the history of lender. Legal lenders are licensed and authorized to operate as a private lender. They follow fair lending policies and always give prompt response to all the queries asked by their customers. If you find that the lender that you have chosen does not have license and authority to work then don’t go with the lender.
Question 4: Are you capable to repay the loan on due date?
Answers: At the time of accepting the contract regarding payday loans, you automatically agree on repay the total amount i.e. Main loan amount, interest amount and additional charges (if any) to the lender at specific time frame and hence you should also check your earning source as well and check whether you can afford to repay the amount on time or not. If not then consider not taking that much amount as loan. Failure of repayment can cause bad effects on your credit score and you can get blocked from taking further credits at financial institutions where only good credit ratings are acceptable.
You should act smart while considering all your options and find yourself a good payday lender that can provide you the required amount of cash with all the features that are meant to help you. Always prefer a genuine, legal and cost-effective payday lender that will give you fruitful experience while payday lending.