Avoid Payday Loan Pitfalls: Insider Tips to Protect Your Finances

If you are cash strapped or face with an urgent financial emergency, it seems that borrowing a small sum of money as a cash loan for a short span of time seems like a very good solution. But, before you take the bait and take on that payday loan, make sure you read this article.

Top Things To Consider Before You Take That Plunge

1. Interest rates can get sky high.

You have to know that alternative payday lenders can have an APR or Annual Percentage Rate as high as 5000%! The money comes fast, but the repayments can be a total nightmare for anyone.

2. They will have access to your bank accounts.

Based on our firsthand experience, many lenders collect repayments off of your debit or credit card. They have the authority to take payments from your bank without having the need to ask your permission for it.

3. Know that you can always cancel payments.

You have all the right to cancel payments. If your bank makes any payments right after you cancel, ask them for a refund.

4. Ask loan help from your parents or relatives.

Before you take on a payday loan, ask first your parents or relatives if they can help you. Perhaps, they can share their money with you and you can pay them back in installments.

5. Payday loans are to be repaid in a very short span of time.

Drawing from our experience, Payday loans are easy to borrow, but you have to pay them back in the next pay day. Many borrowers fail to pay in time, and so their loans earn interest. Many of them take out another pensioner loan just to repay their existing loans, and the vicious cycle goes on, and on.

6. Do some research first and look somewhere else.

Do your research; you have to know exactly how much you will pay back in entirety before you get a same day loan. Many lenders have payday loan calculator, check on each. Some lenders deceive borrowers into lending without showing how much they will have to pay eventually. Do not fall prey.

7. If you do not pay, expect to be harassed, intimidated, and pestered by payday loan collectors.

This is a sad reality when it comes to payday loans collection. Do not be a subject of their intimidation and stay free of stress by repaying your loans and or avoiding payday loans altogether. Or expect to be bombarded by many calls every day, sometimes around 15 times a day!

What are brokers? They help introduce you to people who are willing to lend money to you. There are two options when getting a loan, either working with a direct lender, which is considered a no broker loan, or using a broker to help introduce you to these direct lenders.

8. Fast loans are easy, but expect poor customer services.

As indicated by our tests, loans may be granted in as fast as 5-10 minutes. But the office of the Financial Ombudsman said they receive over fifty complaints about payday concerns each month. Several complaints are about money taken off their credit or debit cards without their approval, or the unfairness as well as very poor customer services.

Paying off credit cards in a timely manner will build your credit so that you can more easily borrow money. If you find yourself unable to borrow through conventional methods because you have a bad credit history, consider applying for a no credit check loan.

Once a borrower is unable to pay back, the office of Fair Trading says lenders have the following recourse – freeze the charges or provide another repayment plan. If you can’t pay your loan in full, ask your lender what they can do for you.