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Necessary Tools For Choosing A Good Payday Loan Lender

Mar 23, 2008
You have probably seen the commercials for payday loans, also called cash advance loans. They are all over the TV these days and you most likely haven't given them a second thought until now. Your car needs work and you don't get paid for a few more days, but you can't get to work unless your car gets fixed. It's a catch 22 scenario that happens every day all over the country to more people than you can imagine. Emergencies happen and you will see several people looking for ways to get themselves and their families through a financial crunch now and then. This is precisely why the payday loan industry has grown so much in recent years.

So you know you need a payday loan but you are not quite sure how to find the best payday loan company for you and your individual situation.

Here are a few questions you should ask yourself to help you in determine what to look for in a good payday loan lender so that you can make an informed decision with the least amount of trouble.

What is a Payday Loan Lender?

Payday loan lenders offer short term loans to people who find themselves in a financial bind between pay periods. They offer quick money that you can usually have in less than 24 hours. As you might expect, these lenders are in the business to make money, so payday loans aren't free. It's quite the contrary, in fact. Most payday loans will need to be repaid within two weeks. The specific term may vary from company to company, but two weeks is the average across the country.

What do I look for?

When looking for a payday loan lender there are several things to consider before you sign on the dotted line. First, you should find out how long the company has been in business. With the industry growing as quickly as it has, hundreds of companies have sprung up seemingly overnight. You should only consider doing business with a company that has been around long enough and has proven themselves stable. The best way to compare between different payday loan companies is by doing an Internet search. On the Internet you will find detailed information about specific payday loan companies as well as reviews from people who have done business with them in the past. If you cannot locate the information you need on the web, an alternative would be to contact your local branch of the Better Business Bureau. They maintain records on companies doing business in your area and individuals who have accolades or complaints will contact them to register those situations and seek a resolution when they feel they have been wronged.

Next you should look at the requirements that will be necessary to complete the process. What specific information does the payday loan company require as part of the application process? Most lenders will not require a great deal of information up front so long as you meet the following requirements:

- You are 18 years or over as you need to be at least 18 years of age to enter into a legal contract in the United States;

- You have a checking account; and

- You can prove that you have a stable job earning a certain pre-determined minimum per month. The minimum monthly income may vary from company to company.

How much money can you get?

Most payday loans are for a relatively small amount, usually between $100 and $1,000, although some companies will offer a much higher amount. You should have a good idea of much money you really need before you look and don't let them talk you into a loan for more than that amount.

What are the fees associated with the loan?

Payday loans are not cheap, and you can expect to pay high fees for using the services that these companies are offering. Ask what the fees are going to be before you commit to taking the loan. This can save you a painful surprise down the road.

When do you have to repay the loan?

Find out how long you have before the loan must be repaid. In most cases, a payday loan will come due in two weeks.

By asking the right questions up front, you will find it easier to decide which payday loan company is best for you.
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