Payday Loans

6 Signs Of An Illegitimate Payday Loan Store

If you are looking out for a payday loan store to borrow a short-term cash advance, there are plenty of factors that you must take into your careful consideration. First of all, you must make an informed decision whether payday lending make the financial sense for you. You must be well ware of the very fact that payday loans are very easy to borrow but very difficult to repay because of the huge cost involved with the same. Besides that, even other terms of the loans are also not in favor of the borrower. Borrowers who fail to repay the loan on its set due date often get trapped into a nasty cycle of debt. But, if you are sure that you have no better alternative and that payday loan is your only answer to borrow money needed to deal with the temporary financial emergency you are hit with, you must at least do a thorough background check of the lender in question. Whether it is a local store or an internet-based e-store, you must look for these six signs. These signs spell danger, as they are suggestive of an illegitimate enterprise.

Upfront Fee Requirements

A payday loan store that requires applicants to pay a certain amount of fee (no matter how small it is) in advance is very much likely to be an unscrupulous one. You are advised to avoid all those payday lending programs, where you are required to make upfront payment in the pretext of service fee, payment for insurance, application fee, security deposit or any other such things. Legitimate lenders will only check whether you meet the basic eligibility criteria or not; if yes, they will approve the loan for you, but they will never charge you an approval fee. You may also across many third-party lenders, which accept applications from you and then shop for the loan on your behalf and get it for you. They guarantee approval and charge a fee for this guarantee. You should stay away from all such lenders as well.

Payday Loan Programs For People With Bad Credit

It is very easy to find a payday loan store that does not mind lending you cash advance even if you have bad credit, but you have to be very careful because most of them try to take advantage of your vulnerable financial situation. Do not trust those stores that send you emails or letters informing you that you qualify for very low-rate payday loans no mater how poor your credit rating is. Likewise, you must also be wary of those payday loan companies that claim to approve your loan just on the basis of the information provided by you over the phone. They call their cash advance programs as ‘no verification payday loans’. Trust me, they are not fools; in fact, they are only trying to fool you. So, protect yourself and never sign up for any deal with such lenders. If you already have bad credit and still take a payday cash advance, it is very much likely to cause further damage to your finances, which can be suicidal, as you may even end up getting bankrupt.

Secured Payday Loan

It is very important for you to keep in mind that there is nothing like a secured payday loan. With the rapidly growing popularity of payday loans, many lenders these days also offer secured cash advance programs, where you are required to put a valuable asset or property as collateral against the money you borrow. If you come across a payday loan store that claims to offer a cash advance at a very attractive rate if you sign up for their secured programs, you should take it as a huge red flag. The FTC (Federal Trade Commission) terms such lenders as predatory lenders. You are advised to consider conventional loan programs if you are considering borrowing a very low-rate secured loan, such as a home equity loan.

Pressure To Take An Immediate Action To Ensure Approval

Many payday lenders require applicants to send them a money order or to wire certain amount of funds in order to ensure their loan application gets approved. This is similar to the practices described above and you are advised to stay away from them because they are nothing but payday loan scams.

Fake Contact Details

Fake contact details provided on the lender’s website is another sign of an illegitimate payday loan store. So, you have to be very careful if you are considering borrowing from an Internet-based lender or from a lender who claims to have their offices based in another state or another country. You are strongly recommended to confirm their contact details with organizations like the Better Business Bureau (BBB), the yellow/ white pages of the phone book, directory assistance and the US Postal Service.

Lenders Asking For More Than The Basic Information

Last, but not the least, you should never provide confidential, private information to payday lenders while you are applying for a cash advance. Lenders who ask for information like your bank account details, credit card number, Social Security Number or other things like that are very much likely to be illegitimate and unscrupulous ones. Sometimes, they may also ask you to provide information that is quite irrelevant, such as your mother’s maiden name. They can use all these details to perform identity theft. Therefore, avoid all such lenders.

If you must take a cash advance, you are advised to borrow it from a local payday loan store, that too, only if you are confident about their legitimacy and reputation. Besides that, you must obviously look at the basics as well, such as whether you can practically afford to make timely repayment. If you know you are not financially capable enough to repay in time, you should never borrow these loans, as they will bring short-term relief for you but push you toward a long-term debt problem.

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Posted in Payday Loan Companies | 2 Comments »

2 Responses to “6 Signs Of An Illegitimate Payday Loan Store”

  1. Scott says:

    Pay day loan providing companies are present every where in the market but most of them are unscrupulous one, it is very important to choose a genuine and reputable company. You should also think many times before taking a pay day loan because it is very easy to get a pay day loan but it is equally difficult to repay the loan in time due to its spy-high interest. Not only the interest but also some other factors are responsible in making the pay day lending very risky business to adopt. You can easily identify the fake companies by looking some easy characteristics of the particular company you want to go with. There are some very easy features you can look in a company if the company demands the fee in advance from you whether it is like the service fee, application fee or security deposit, the company must be a fake one, never try to deal with any such company. The company which provides pay day loan to any body, even to the people having bad credit score can not be a genuine company because such companies are there in the market to get the advantage of the people who are suffering from bad credit and are in need of some instant money.

  2. John says:

    Cash until pay day loan is actually very risky to accept. Any person facing urgent need of cash easily attracts towards such loans. These loans are small amount of cash advance which has to be paid back on the set due date which is your pay day. The period of time is very short and the rate of interest is very high. These two things make these loans quite expensive. Such type of loans can help you today but the after effects will ruin your financial position completely. Some times, you can be charged as per the interest rate of 700 % per annum. If you look around your elf, take a deep breath and try to search for some better alternatives than pay day loan. Your employer can prove to be the best possible option for you, as he can provide you cash advance against your salary. But this option will work only if you have a consistently good employment record. Your impression can pay for you, you can get the over time and will be paid for it. You budget will also help you to getting out from this situation. You can postpone some less important tasks and use the money for today’s need.

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