While many people have heard of payday loans, all of them are not really sure how they work. If you walk into a financial situation like this with no knowledge, you can end up losing your footing. Read the following list of do!s and don’ts before you go out there and apply for a payday loan.
DON’T sign up with the first lender you come across. There are thousands of lenders out there and all of them have their own set of rates. Signing up with one company too quickly can lead to you making a decision that can cost you a ton of money. You should research a minimum of 10-15 companies before you settle on one. This is more than enough to make the correct choice.
DO call and talk to someone in customer service before you do anything online. There are lots of scammers out there pretending to be lenders in order to get personal information from people. If you do not see any contact information available for a company, this is a sure sign that you should look for someone else to do business with.
DON’T lie on your application. This is important for two HUGE reasons. The first issue is that lying about your income on an application may make you eligible for a loan you really cannot afford to pay back. This is a recipe for disaster, so avoid this at all costs. The second reason that this is a bad idea is because it can really hurt your chances of getting a loan if a company finds out you are dishonest. They will reject your application and bar you from borrowing from any of their affiliated lenders.
DO borrow as little as possible. If you are getting the money to buy a $500 part for your vehicle, this should be the amount of the loan. Borrowing a little extra is an easy way to get behind. Many lenders will deliberately offer you more since this means more money for them in the end, so be very careful to only borrow the amount you need.
DON’T be late when it is time to make payments. You would be shocked at the amount of fees that are charged for late payments. The interest rates are already astronomical for payday loans, so you do not need this. This is why you should only borrow money that you know you can pay back. If you know you are going to be late, call the lender right away. While you will still incur a late fee, you can avoid overdraft charges from the lender trying to debit your bank account for money that is not in there.
Many people think of payday loans as an easy way to get out a jam, but it some cases it makes things a bit more difficult. You should only get this type of loan if there is no other option since the rates are so high. The advice here should help you make the right decisions when it comes to the loan.