Tips To Find The Cheapest Payday Loan
If you are looking out for the cheapest payday loan, there are several things that you need to take into your careful consideration. Though payday lending in general is not recommended because of its predatory nature, if you must borrow it, it always pays to do a thorough comparison shopping. Besides that, it is also very important for you to be well aware of the payday loan laws applicable in your state. These laws vary from one state to another. Awareness of these laws will help you decide whether the payday lender in question is running a legal and fair business or not. Following are some of the most important factors that you must work on while you are shopping for an affordable payday cash advance.
Check The Legal Status Of The Lender
When it comes to choosing the cheapest payday loan, the first thing you have to do is to check whether the lender in question is duly licensed to offer this type of loan programs in your state or not. It is very important for you to keep in mind that many states have banned payday lending. Many others have imposed low rate cap. But, there are still many other states that allow extremely high rate payday loans. So, make sure you do a thorough review of the laws in your state. If payday lending is banned in your state and an Internet-based lender is still offering you a cash advance, you are advised not to borrow it. An online payday loan company often claims that since they are doing their business through Internet, the state laws do not apply to them, which is just not true. Whether it is a local payday loan store or an Internet-based lender, they must comply with the laws of your state.
Review The Reputation Of The Lender
Just because a lender claims to offer the cheapest payday loan to you does not necessarily mean they make the right choice for you. There are many unscrupulous lenders in the market that try to attract borrowers by making lucrative offers, but there are hidden expenses involved that eventually make the loan very costly. Therefore, you have to be very careful with the type of payday loan you are signing up for. You can do a thorough background check of a payday loan company by checking their past records with organizations like Better Business Bureau and Consumer Complaint Forums. Do not sign up with a company that has lots of consumer complaints against it.
Compare Rates And Fees
Once you shortlist a few reputable lenders, the next thing you have to do is to compare their rates and fees. Since the payday loan market is a highly competitive one, you can even try to negotiate better rates. While you are shopping for the cheapest payday loan, the most important thing is to make sure there are no hidden expenses involved and that all terms and conditions of the loan are clear to you.
Borrow As Much As You Need
Just because it is very easy to obtain a payday cash advance, it does not mean you should borrow a high amount. Since these loans are much costlier than conventional loan programs, you should try to keep the loan amount to as small as possible. Never borrow more than what you need.
Review Your Repayment Capabilities
The cheapest payday loan for you is obviously the one that does not just cost you little but also the one that you can easily afford to repay in time. So, review your budget plan thoroughly before you sign the loan contract. Look at your monthly income and expenses and determine whether you will be able to have enough money in your bank account on the set due date to ensure timely repayment. If not, you are advised not to borrow because payday loans can then push you into a vicious cycle of debt. The repayment period is usually very short for these loans and the interest rates are very high, and this is something that makes these programs very risky. So, you have to be very careful with your decision.
Last, but not the least, you must first try your best to find better alternatives. It is only if there is no other possible way to arrange the cash you need to meet your financial requirements that you can consider borrowing a payday cash advance. Even then, make sure you keep in mind the above things, as it will help you find the cheapest payday loan.