Understand that the mean APR on payday loans is 651.79%. Although states have different averages, this is the national average, which is extremely large. Of course you are not likely to see a number that scary listed in your loan paperwork, but that does not mean you will get a better deal. They may have just put the number in the small print where it’s not easily found.
Payday loans, also known as cash advances, are one sector of the financial market that makes millions yearly. This is because these types of loans are not cheap, and usually bring a profit to the lending company. Always conduct your due diligence so that you can be certain to obtain the most advantageous rate. Also remember to factor in the fees charged by the lender, which can be substantial.
If you are your own boss, you may need special paperwork to get a payday loan on self-employment income. If you are self-employed you might have extra terms and conditions. If you are not sure what you need, call customer support and ask them to help you minimize any mistakes that can prevent you from getting your loan.
If you are unable to repay the loan on the due date, contact your lender to get an extension. You do not want to let this type of loan roll over. This will minimize the interest and fees you’ll have to pay.
Make sure you check out the BBB (Better Business Bureau) prior to registering for a loan with a lender. This helps you know whether each lender is reputable, and this should provide you with some peace of mind when you sign your contract.
When you are applying for payday loans, keep in mind that you will have to pay very large interest rates whenever the loan term expires. Consider borrowing money from friends, family members, your work or your bank before accepting a payday loan. If a payday loan is necessary, make sure to do your research and read all the fine print.
A payday loan is a good solution in certain situations, but do not let this become a habit and always explore other options first. The tips in this piece will prove critical if you need to go this route.