Like any other type of industry, the payday advance industry has its share of companies that abide by the rules, as well as a few that do not. It is therefore incredibly important to do your research and to educate yourself on the payday advance process before entering into a payday advance contract.
Although it may be difficult to identify at first glance a payday loan shark, you can learn about the many underhanded tactics these unscrupulous companies use to lure individuals into taking out a payday advance.
Here are the top tips for recognizing disreputable payday advance companies:
1. Beware if the payday lender wants to rush you through the process - It is always important to take the time to fully understand the loan and its terms and conditions, and a payday lender should understand this. However, if the payday lender begins pushing you to make a decision (before you come to your senses about the disreputable company), you may want to take a step back and re-examine whether the payday advance lender is someone you want to deal with.
2. Beware if the payday lender does not provide clear answers to your questions - Never, ever proceed with a payday advance loan if you have unanswered questions. The payday lender should be willing and able to answer all of your questions and concerns; if they cannot, then they are probably not a company you want to do business with.
3. Beware if the payday lender does not have the APR and fees of the loan readily available on their website - All of the payday loan's terms and conditions, including the APR and any related fees, should be readily available on the company's website. Simply put: it is best to avoid taking out a payday loan with any company not willing to disclose this information.
4. Beware if the payday lender operates out of the country or does not have contact information - Payday lenders that operate out of the United States must operated under strict rules and regulations, all of which are in place to protect consumers. However, companies that operate outside of the country often find a way to circumvent these regulations, thereby leaving you vulnerable to disreputable business practices, such as outrageous interest rates.
5. Beware if the payday lender offers a too-good-to-be-true APR or loan term - Although it is always worth your while to shop around for a competitive APR, it should also be mentioned that a company that boasts a much lower APR than other similar companies may not be completely forthright in their loan terms and conditions. Proceed with caution when dealing with a too-good-to-be-true payday advance lender.
More often than not, we apply for payday loans during times of stress, as most individuals only apply for them when they are in a financial crisis. Subsequently, many individuals, in a rush to get their money quickly, fail to research payday lenders to make sure that they are dealing with a legitimate company and that they getting the best APR and loan terms. Make sure you don't become a victim, but rather choose a reputable payday loan company based in the United States.
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