Posts Tagged ‘cash advance lenders’

How To Compare Different Cash Advance Lenders?

If you are considering borrowing a payday loan and are looking out for the best company, you may find the task quite a daunting one, as there are thousands of cash advance lenders in the market and each one of them claim to offer the best programs. But, obviously, the best lender for you is the one that is duly licensed and offers short-term loans at reasonable rates. Following is a brief overview on how to compare different lenders and choose the one that makes the right fit for you.

Is The Lender Running A Legitimate Business?

It is very important for you to keep in mind that payday lending is not legal in all states. And, even in those states, where it is legal, it is mandatory for cash advance lenders to obtain license from the concerned state authority. Therefore, the first thing that you have to do is to find out whether the lenders in question are duly licensed and that they are running a legitimate business. You have to be more careful if you are reviewing an Internet-based lender. You are advised to avoid borrowing from those online payday loan companies that do not have any physical address. Besides that, it is also important to note that even online lenders must also follow the payday loan laws applicable in your state. It means if payday lending is illegal in your state and an online lender is still offering you a short-term cash advance, it is still illegal. Likewise, if your state laws have restricted the maximum amount of interest to $30 (per $100 of loan) and an online lender or a payday loan store is charging you a higher amount of interest, it is again an illegal activity. You should not just stay away from such lenders, but also file complaints against them.

Compare The Cost Of Loan

While you are comparing different cash advance lenders, the most important thing is to review the overall cost of loan. Most lenders charge interest at an extremely high rate (usually 3-digit APR), but you may still be lucky enough to find a company that offers short-term payday cash advances at a very low rate. It is also important for you to keep in mind that lenders also charge hefty amount finance fees in addition to interest. Besides that, since the repayment period is usually very short, just a couple of weeks, you also need to do a thorough calculation and determine if you can practically afford to make timely repayment. Read the fine prints thoroughly to review the consequences of missing the due date. In most cases, missing the due date will cause the overall outstanding balance on your loan to grow faster than your imagination because lenders charge interest (at the same high rate) for every single of delay. A one month of delay will push you neck deep into a quagmire of debts.

Overall, borrowing money from cash advance lenders makes financial sense only if the cost of loan is very low (something you can easily afford) and only if the repayment terms are also convenient enough (with no hidden trap).

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