Considerations when choosing a payday lender
Loan qualifications
One benefit of getting a payday is that you don’t need to have good credit. There are, however, some standard requirements you must meet in order to qualify for a payday loan including a steady income and proof of address.
Payday loans meaning borrowers get money fast but also have to pay back the amount they owe with interest in a limited amount of time.
Additional fees
Lending companies often charge people who take out a payday additional fees for the loan, which can add up quickly. It’s important to read all the fine print before deciding which payday or title lender to use. Get multiple quotes before deciding on a lending firm, and ask what additional fees you will be expected to pay.
Processing and document fees: Lenders often charge borrowers fees for the paperwork required to get payday loan.
Late fees: Lenders frequently charge borrowers a late fee if repayments are late or documents aren’t exchanged on time. Make sure to find out what late fees are and on what date your payment will be considered late.
Finance fees: Payday lenders charge a finance fee upfront, which you include on your post-dated check. If you roll your loan over for an extended period, you will be charged this initial finance fee plus an additional finance fee. The fee will continue to grow until you finally pay off the full amount of the loan.
Interest rates: Interest rates for payday loans can be as high as 400 percent APR. Lenders are required to tell borrowers the exact APR being charged to the loan before the borrower agrees to the terms of the loan.
Maximum loan amount
Payday loans are a quick way to get money, but the amount of money a borrower can access is usually very limited. Lenders often have a strict cap on the amount of money they will lend for both types of loans.
One paycheck: Payday loans can be for any amount, but they are traditionally only written in the amount of one full paycheck (or less) so borrowers will have the money in their account when their check is cashed.
Length of loan
Payday loans are short-term loans, meaning borrowers get money fast but also have to pay back the amount they owe with interest in a limited amount of time. The length of time a borrower has to pay back their loan varies from lender to lender, but there are some industry standards.
Payday loans: Payday loans are only for one pay period. You will set up this timetable with your lender, and they will cash your check after you get your next paycheck.