Best Short Term Loans
Find the easiest payday loans to relieve your stress.
The Holidays are Over
Bills are piling up.
Your bills from the Holidays are Piling Up.
Need more money.
You need more money to pay for it all.
Payday Loans could be your savior.
How to be careful choosing a payday loan provider
Finding the right lender can be tough.
Before anything else, you need to ensure that the payday loan company that you are dealing with is legitimate and is licensed to operate in your state. There are states, such as Florida and Massachusetts, where payday loans are illegal. Check the company with the Better Business Bureau or Attorney General’s Office in your state to ensure that you are borrowing from a legitimate company.
Payday loan lenders make it very easy for anyone to avail of this kind of financing. Many even offer one hour loan processing. However, do not be deceived by how fast you can get cash from such lenders. Always check the interest rates carefully because many lenders charge exorbitant fees. You do not want to end up paying interest rates that are bigger than your loan principal.
Aside from the interest rates, you need to consider the terms and conditions of the payday loan. For instance, payday loans can become due anywhere between 15 and 90 days. Which payment period is advantageous depends on your capacity to pay. It would be best to get quotes from several lenders so you could compare which payday loan company can offer you the best deal.
Common Pitfalls for Payday Loans
Andrea Felts had money troubles after her divorce. To cover expenses, the high school principal from Albuquerque, N.M., took out a $400 loan from an online lender, which charged her an additional $120 to borrow the money for just 16 days. That's comparable to an annual interest rate of 684 percent.
Felts didn't have the full $520 to repay at the end of the 16 days, so she rolled over the loan for another $120 in fees. Before she was able to get together enough money to pay off the total, she had rolled it over five times and paid $600 in fees on the $400 loan.
Payday lenders hold a borrower's post-dated check or tap directly into his or her bank account to withdraw the money on payday. With most traditional loans, the principal and interest are paid down in regular installments. With a payday loan, the borrower must pay off the whole loan on the next payday. That's often impossible, so those people repeatedly pay hefty fees with nothing going to the principal.
New Mexico allows payday lenders to charge up to 417 percent annual interest. But as Felts' situation shows, rate caps might be ignored by online lenders peddling payday loans. Felts' attorney says she is pursuing a class-action suit in New Mexico.
Consumer protections vary widely by state. Only 15 states have caps below 60 percent. But the payday-loan industry is working to weaken even those laws. During the 2008 election season, the industry spent almost $30 million on Ohio and Arizona ballot initiatives that would have removed caps. But voters in both states roundly defeated the industry's efforts.