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How to get and use your payday loans wisely

  • How to get a payday loan

Getting a payday loan is relatively easy. There is very little requirement to qualify. Moreover, the application process has been made as simple as possible by the payday lenders. However, you should be aware of the risks.

  •  Payday loans explained

How to get a payday loan
How to get a payday loan

A payday loan is a short-term loan unsecured loan. That means you have to return the money you have borrowed by the next payday. Normally, that is in about 14 days. For that reason, payday loans are usually loans that invlove small amounts of money. They are meant to cover some bills you are having problems with or unexpected expenses such as a medical bill or even a holiday which you booked on a whim.

  •  The differences between in-store and online payday loans

With payday loans, there are two options – you can get one online or the old- fashioned way with an on-store payday loan. We highly recommend that you use the online option. That is because it has several benefits.

  • It is much faster

You can apply, get approved and receive the loan within 48 hours. Payday loans are the fastest way you can borrow money to cover your expenses and taking one online makes it even faster.

  • It is extremely convenient

You can use the online service 24/7
You can use the online service 24/7

You can use the online service 24/7. There are no restrictions, no closing hours. Whenever it suits you is the right time. Maybe you work long hours or you have  two jobs and it is hard for you to make time to go to the bank and wait in line. That is not a problem anymore. With payday loans online, you can simply fill out the online registration form whenever it is convenient for you. It just takes five minutes!

  • Less interaction

You don’t have to deal with a person who evaluates your behavior and situation. Instead, you will only be judged by the information on your application and that can be beneficial for you in many aspects. For example, in case you don’t have very good communication skills or you just get nervous at interviews, applying for an online payday can save you all that trouble.

  • How to get a payday loan

The procedure itself is very simple. However, there are still some conditions you need to fulfill in order to receive the loan.

  • Find a lender

It is extremely important to read the loan conditions
It is extremely important to read the loan conditions

In order to get the best deal, you need to do some research. Go online and compare several payday loans providers. There are a number of criteria you can use to choose the best one  – having good customer comment, ratings or simply by the design of the website and language used. The most important thing is that you like your payday lender and feel comfortable with the service they provide.

  • Read the fine print

Taking out a loan is a contract. By filling out the form, it means you agree to certain conditions. Normally there is even a box where you are required to tick to indicate that you have agreed. It is extremely important to read the loan conditions. That is the place where you can find all the information such as when you have to pay back and what the consequences are if you don’t. You should be aware of the fact that there are differences in the offers by different lenders. Make sure you have read all the information carefully before you apply. It is important that you know the interest rates and the penalties if any.

  • Double check your lender

You can find out more about your State regulations on payday loan businesses. Some may require special registration. If that is the case, there would be online source where you can check if the company you have chosen is registered and licensed. There is always some additional information on the the Attorney General of the State website.

  • Fill out the application

 fill out the online application on the website
fill out the online application on the website

You can fill out the online application on the website of the provider you have chosen. It is like a simple questionnaire and you just have to fill in basic information about yourself – name, e-mail, etc. That should not take more than 10 minutes. After you have filled out the application, you have to submit it. By this step, the application process would have ended.

  • Pre-conditions

In order for the loan to be legal, there are a couple of conditions every borrower must fulfill.  First, there is an age limit. One should be at least 18 years old to be able to get a payday loan. Under that age, you cannot legally give consent for receiving a loan. Secondly, one should have an active checking account. That is because with online payday loans, the money is directly transferred to your bank account. Additional conditions may include proof of income (although your credit score is irrelevant, some lenders might require you to be employed). You might also be required to provide some form of identification.

  • Credit score

The best thing about online payday loans is that your credit score plays little or no role in you getting a payday loan. That is because the main idea of payday loans is to be quick and affordable. Since the loans are for relatively small amounts of money, there isn’t really a great risk for the lender. Therefore, payday loan lenders are willing to lend money with bad credit score. In addition, if you use the payday loans system wisely, there is a chance for you to actually improve your credit history.

  • How to use payday loans wisely

Payday loans can be extremely useful in times when you find yourself in financial troubles. However, you should be cautious when it comes to borrowing money. There are a couple of things you should know and look for. For example, payday loan debt cycle and predatory lending can be harmful to your future budget.

  • Understand

 make sure you fully understand the whole procedure
make sure you fully understand the whole procedure

The best way to use your payday loan wisely is to make sure you fully understand the whole procedure and all the possible risks. There is plenty of information on various sources. Here is a short list of the most important things you should look out for. If you still have questions, don’t hesitate to seek further information. It is better to be well-informed on money related topics.

  • Stay clear of the debt cycle

A payday loan debt cycle occurs when you are unable to repay the original loan and take out another one to repay it. The same thing can repeat many times and you find yourself trapped. The other option is that you get offered to renew the loan for yet another term in exchange for a small fee. When you don’t have time to deal with the problem and don’t have the money to repay the loan in full, that offer sounds like a good solution. However, try to stay away from the payday loan debt cycle because with time, it only gets harder to get out of it.

  • Predatory lending

That is a term to refer to lenders who use unfair and deceptive practices. That term can mean offering payday loans in States where they are prohibited to setting interest rates over the regulated maximum amount. There is no legal definition for the term ‘predatory lending’ in the United States because it is so broad. That is why some federal authorities try to use the catch–all term in the legal provisions regarding such practices. Apart from that, there are laws against some of the specific practices.

  • Know the true cost of the loan

You may think you just need to repay what you have received and that is that. However, what if you can’t manage to pay on time? In that case, the amount you owe start increasing because of the interest rates. Most payday loans have very high interest rates. It is best if you make a chart and see how rapidly the sum goes up. Simply do the math and that will keep you motivated to repay the payday loan as soon as possible.

  • Pay off on time

Pay off on time
Pay off on time

The wisest thing you can do with a payday loan is to repay it when it is due. That is normally 2 weeks from the date you receive the money. Consider cutting back on some expenses if necessary. Not dining out for a week is a small price to pay to not having problems later. In case you have really have trouble paying back, ask a trusted friend or a family member if they can help you out. Even if you have to repay them, there wouldn’t be a  high interest rate that is doubling and tripling the principal amount speedily.

  • Get your priorities straight

Evaluate what is most important to you carefully. Every month, there are bills to be paid and if you have several loans on top of that, you may need to pick which ones to pay now and which ones to take care of later. Coming up with a smart plan may be able to help you stay out of trouble. Make sure you make the right decisions and put the really important things on top of the list. When it comes to debt, pay back the ones that have the highest interest rates first. That is the right way to approach the situation.

  • Beware of Continuous Payment Authority

Beware of Continuous Payment Authority
Beware of Continuous Payment Authority

Some creditors require authorization to be able to withdraw directly from your bank account money when your payment is due. Sometimes, that may just make the process easier for you. However, if you have other urgent needs to take care of, having money being taken out of your account may be more of a problem. In addition, it is possible that there is no money left in the account and your lender will charge you a penalty fee for that which will be on top of the bank overdraft.

If you want to withdraw your authorization, you have the legal right to do so. There are two approaches – you can either inform your creditor directly or ask your bank to cancel the authorization. Of course, the second way is more secure. However, if you decide to go with the first one, try to do it in a way that you will later on be able to prove your version of the story. That can be done via e-mail or certified letter, for example.

  • Automatic renewals

If you have decided it is suitable to have the money taken out directly from your bank account and you don’t want to cancel your authorization, there is only one thing you have to check. Make sure your lender withdrew the whole amount you owed. What happens is that sometimes, lending companies with authorization simply take a renewable fee and prolong your loan for yet another period. That is a problem because during that time, the amount you owe may keep rising because of the interest rate. So in case you have the money to pay back and you have chosen to do that through payment authorization, make the simple effort and keep of track of the amount that is being withdrawn.

  • Collectors

no need for you to tolerate threatening phone calls
no need for you to tolerate threatening phone calls

Depending on the amount you owe and how long it has been overdue, you may start to receive calls, e-mails and letters either directly from your lender or from professional debt collectors. Although it is normal that you get reminded that you need to pay back eventually, some of the practices used are disturbing and some are even illegal. Make you sure you know your rights and don’t let yourself be bullied. There is no need for you to tolerate threatening phone calls or any other such interactions. Debt collectors don’t have the right to threaten you with legal implication including prison time. You can report such behavior to the authorities. To make a stronger case, you can also record some of those calls or keep those annoying emails. Any illegal loan practices can be reported to the Department of Financial Services or the Federal Trade Commission.

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