If you are in need of fast money for something very important, you have probably considered taking out a personal loan. A payday loan would be the best way to get the money you need within a day or two, but there are some things you must be aware of before jumping into that type of loan.
Payday Loan Advantages
There are many advantages to taking out this type of personal loan. For starters, you only need a consistent income to qualify for most payday loans. Most lenders offering loans based on paychecks do not require credit checks. They do not have books of guidelines and hoops that you must jump through in order to qualify for the loan. They simply require you to have a job that delivers a steady paycheck. Whether you are a waitress or a CEO, the same standards apply with this type of lender.
Another advantage is the speed in which the money can be delivered. If you walk into a payday loan establishment in your community and are able to prove that you have a job, you could walk out with the money the same day. If you go with an online personal loan service, you could have your money electronically delivered to your bank account within twenty-four hours. In some cases, it could be even faster.
You also do not have to put up collateral for this type of loan. This means it can work for you even if you do not have a home or vehicle to put on the line.
The final advantage to getting a personal loan is the ability to get future loans if you find yourself in need of fast money in the future. Once you establish a relationship with a payday loan service and they know that you will repay your loan on schedule, they will typically be open to giving you loans whenever it is needed. This gives you an outlet for fast cash whenever the need arises in the future.
Payday Loan Disadvantages
While those advantages are convincing, you have to be just as aware of the potential drawbacks to using a personal loan service that operates on payday loans. The biggest disadvantage is the fees involved. There is no hiding the fact that a payday loan service will charge higher interest rates than you would find with a loan through a bank or credit union.
Yet, since a payday loan service typically does not check credit, they are able to work with people would be considered too high risk for many other lenders. This is why they must work with higher interest rates, especially since no collateral is offered with the loan.
Taking out a personal loan is not bad. Taking out a payday loan is not bad, either. It is taking the wrong loan from the wrong lender that can turn out bad. The good news here is that once you find a good lender willing to extend this type of short term loan, you will never again have to go out searching. When you need fast money and are sure of your ability to repay the loan, you will know exactly where to turn. Following are some simple guidelines on finding the right lender for your loans.
Ask for Recommendations
Part of the allure of a payday loan is that it does not have to become news with all of your friends and family members. Many people go for this type of personal loan because it does not require a credit check, and because most lenders do not report to the credit agencies at all. This is therefore the most secretive type of loan you will ever find.
Yet, you need recommendations because it is a powerful way to find the most trustworthy personal loan lenders. If you do not have others in your personal life that you would trust to ask for a recommendation, you can go online and get the opinions of other consumers who you may not know in real life. Search for message boards that allow consumers to leave feedback on different loan providers. You will get some idea of who others are trusting, and who they are staying away from.
Read Every Page of the Site
Online payday loan providers are clearly the easiest to work with, since they allow you to fill out an application online and receive money directly into your bank account. It is tempting to just go straight to the application and put in for your payday loan, but that is a mistake. Take the time to read every page on the site. Make sure you feel just as comfortable with them after that as you did when you first found them.
If you are not sure about the terms of your personal loan, or have questions about how a lender operates, you have to ask those questions prior to filling out an application. There should be a phone number where you can talk to a human being who has all the answers for you. If this is not available, then you may not be dealing with a reputable payday loan provider.
Check with the BBB
Check with the Better Business Bureau to see if other consumers have lodged complaints against the lender you want to work with. If there are a lot of complaints or a personal loan provider is not registered with the BBB, then you might want to turn in another direction for your loan.
It is important to note that many businesses get one or two complaints here and there, yet they are not bad businesses. You are just trying to rule out payday loan services who routinely get a high frequency of complaints from other consumers. If you do not see that, then you have probably found a reasonable business with a valuable service.
One final disadvantage to consider is the fact that you must pay the loan back on time, or you face excessive fees that could put you in further financial trouble. As long as you can pay back on time, a personal loan of this type could be your answer to whatever financial problems plague you.