Thinking of Getting a Payday Loan? Here’s How to be Smart About it
A payday loan makes a convenient solution for dealing with bills or some other unexpected expenses that pop-up from time to time. After the approval, the money from the payday loan is paid directly to the borrower’s bank account. The entire process, starting from the payday loan application to the moment the borrower receives the money, is super-fast.
Another added benefit is that you don’t need to physically go to the borrower’s premises to complete the transaction. You can do this all by either phone, email, or sometimes a combination of both.
Convenience is something that almost all borrowers offer. However, the differences are interest rates, application fees, penalty fees, grace period, flexibility, etc.
How to make the most of your payday loan?
Getting a payday loan is pretty much like buying goods. In this particular instance, the goods are money. In any case, whether you are on the market for money or some other goods, the main rule is the same for everything – try to get the best possible value.
When it comes to payday loans, you get the best possible value by following these principles:
- Checkout as many online borrowers as possible. A simple Google search will help you find the ones that can serve you. The idea is not to borrow from the first borrower you get across, but rather window shopping first before making any decision. While you are at it, make sure that they are regulated by the Financial Conduct Authority (FCA). If they are not, move on towards those that are.
- The lower the interest rates, the better. However, some borrowers compensate for that with bigger application fees and other charges. Because of that, it is important to consider the application charges and other fees when calculating the cost of your loan. The only way to get the full picture of the payday loan is if you add everything together.
- Reputation is an essential factor in the payday loan industry. The best companies in this line of work can be identified by their continuous stream of positive reviews.
- Some borrowers will even ask their clients for their Continuous Payment Authority (CPA) approval even before approving your loan. That gives them the right to access take payments directly from the client’s account. On the other hand, any reputable lender, authorized by the Financial Conduct Authority (FCA), won’t sneak into your account without your explicit approval.
- Keep away from the debt hamster wheel. Your payday loan can get exponentially bigger if you don’t pay it out on time. In just a year, the average yearly percentage interest rate can get as high as 1500%.
Remember that just because you’ve taken a payday loan from some company, you need to comply with everything they recommend or say you must do. If you doubt their actions, you can always reach out to the Financial Conduct Authority (FCA) and check whether that is within the scope of their rights or not.
Plus, you have your terms and agreements contract covering much of what the borrower can and cannot do. If the borrower is violating some terms, you can tell them that, or you can take the matter to the FCA.
However, know that disputes are not that common, and even when one occurs, the borrower and the client try to find a way to resolve it without the involvement of third parties. After all, payday loan borrowers are a business, and they greatly care about their reputation.