In many places in the country, finding a retail payday lender is as easy as walking a block or two. These storefronts continue to increase in numbers in places where payday lending is allowed. At present, only one state, Georgia, prohibits the loans, but some smaller municipalities have placed their own type of ban on these retailers.
For some consumers, especially those with less than perfect credit, retail payday lending sites feel like the only option. While the loans are very expensive, if you use them wisely, they are an option for short term, unexpected financial needs.
Here are three tips to help you use payday loans as they were intended and to choose the best retail payday lending location.
Choosing a Retail Payday Lender
While most retail payday lenders function similarly, they are not all the same. Of course, you should check their fees and interest rates, but there are other things to consider as well. While you might not think that customer service is important when choosing a retail payday lender, you do need to be confident that the lenders will keep their word and are on top of things enough to not make mistakes that could cost you time and money.
For example, one lender cashed the check left by the borrower one week before the loan was due. This caused several checks to bounce. The lender paid back all of the overdraft and bounced check fees eventually, but it was still a huge hassle getting it all straightened out.
Also, if you choose a fly-by-night or independent retail payday lender, it is tough to know how they will act should you, for any reason, be unable to pay the loan back on time. Will they call you at work every day? Will they call your boss?
The best thing to do is select a retail lender that is part of a national chain. While this is no guarantee that you will be treated well, there is most likely to be strict policies that the store will be required to follow.
Payback
One of the best tips about retail payday lending is to pay the loan back early if at all possible. The amount of money that you could save by doing this is significant. For example, if you borrow $500 for 14 days, you may have to pay back $575. If you pay the loan back in one week, however, you may only have to pay back $537.50. Every day early you can pay back the loan, or even part of the loan, will mean more money in your pocket.
Keep in mind that only the interest for loans will be prorated. If any fees are included, such as processing or application fees, those are not likely to be reduced by paying the loan back early.
Rolling Over Loans
Here is a tip about rolling over loans: Don’t do it. This is a trap that many who use payday lending services fall into. This is an example of what happens:
They borrow $250. On payday, they must pay back $287.50. They pay that amount and then turn around and borrow the $250 again. This means they the borrower is going to continue to pay these fees each month.
It is important to remember that retail payday lending is NOT intended to be a long term solution. When you continue to rollover the loans it can quickly turn into a cycle that is difficult to break. Instead, payback the loan in full and do not borrow again unless it is absolutely necessary.
Some states have enacted laws that require a certain waiting period of between one and seven day before they can take another loan after paying one off. If your state has no such law, pretend it does!
Some consumer groups feel that retail payday lending should be banned completely. Others think that each consumer has the right to make decisions for themselves about such financial matters.
No matter which side you are on, it is important that those who choose to use retail payday lenders do so in a way that it will not further their financial distress.
Choose your lender carefully and use the loans sparingly and only when other options have been exhausted. Pay them back as soon as possible and do not borrow again right away. Those are a few tips to help you use payday loans without hurting your financial situation.
Related Links:
Canada payday lending is different than in most other countries where these types of loans are offered. The main reason is that the country has some very tough payday lending regulations. While some other countries have limited interest that payday lenders can charge, they have allowed fees to continue resulting in what still amounts to at least 200% APR and, in most cases, the rate is much higher.
In Canada, however, the maximum rate allowed is 23% and that includes interest and all fees. This new limitation went into effect late in 2009. Other strict regulations have also been placed on the Canada payday lending industry. While some locations allow borrowers to have several payday loans at one time, Canada only allows each borrower to have ONE loan at a time. This restriction was put in place because some consumers ended up owing far more than what they made each payday, creating a cycle of financial hardship that was impossible to correct.
For the same reason, Canada payday lenders are only allowed to loan 50% of a borrower’s income. This means that no borrower will be in the position of having to hand over their entire check come payday.
These changes in payday lending legislation were not popular with lenders, but consumer groups were thrilled at the changes. Many felt the old, more lax regulations did not do enough to protect consumers from practices that some felt were predatory.
Now that the interest rates and fees are the same across the board, finding the best payday loans in Canada is more about customer service and convenience. Below are some tips for getting the best.
Use the Same Lender
Since the interest rates are the same, you do not have to wonder if there is a better deal on a payday loan down the street. That means that you can build a relationship with one payday lender. Of course, the goal is not to use these loans very often, but when you do it’s often best to stick to one lender.
In general, you will be able to get your loan processed more quickly than if you were a first time customer. Also, if you have a good relationship with a certain lender, they are more likely to let you come in a day or two late when a payment is due should something come up.
Pay Loans Back Early
Even though interest rates for UK payday lending are much lower than in some other places, it is always beneficial to pay the loans back early. You will save money on how much you will have to pay in interest and even if it is just a few dollars, that is a few more dollars in your pocket.
Don’t Rollover Loans
Another key to making the best use of payday loans is to resist the urge to take out another loan shortly after one has been paid back. This creates a cycle of borrowing that ends up costing the borrower money and time and only creates more financial hardship.
Instead, use payday loans sparingly and only as a last resort. Some other options that could help you meet your short term financial difficulties include using an overdraft line of credit from your bank or taking a cash advance on a credit card.
Payback Options
Find a loan that allows you to come in and pay back the money that is owed rather than a lender that wants to access your bank account directly. Sure, most of the time there will be no significant problems with a lender directly debiting your account, but there is always a chance that there could be issues.
Rather than dealing with the headache that can result from trying to fix an incorrect, early or double charged debit, just avoid this possibility entirely.
Some lenders require that the loan be paid back via direct debit, but not all do. Shop around until you find a lender that does not have this requirement.
Again, finding a good deal on a payday loan in Canada isn’t the issue. Instead, you can focus on finding a lender that is convenient and where your business is valued.
Related Links:
It is understandable that you may be in need of cash now but this should not be a reason to be a target for online scammers. Payday loans can be a simple way of getting the cash you need quickly and paying it off just as quickly on your next payday. Many people go online for payday loans since they can be approved much more quickly than offline payday loans. No matter how desperate you are for money, you still need to do your research. Follow these five excellent tips to avoid being a target for online scammers:
- You want to choose a reliable source to borrow from. When you have a reliable lender you know that if you cannot payback your short term loan that they will help to get you out of debt with special plans to pay back the loan rather than taking advantage of you. Therefore, you should look out for the Community Financial Services Association (CFSA) seal. If you do not see this seal on the website you are interested in borrowing from then you should move on. You should only borrow from these lenders who are dedicated to the promotion of responsible lending regulations for payday loans and consumer protection practices.
- Do not waste your time filling out various applications for different lenders. Many think this is a good way to get approved as if it were a lottery. Remember, many of these sites will be charging you a processing and application fee. Choose one good company that you feel confident that will accept your proposal.
- Do not trust third party lenders. A third party lender will take your application and take it to other lending companies. This is dangerous since you do not know who this third party is releasing information to. You may even be signed up for various free trials without your knowledge or approval. Remember, your application will have all of your personal information like your social security number and your bank account numbers so cut out the third party and go directly to the lender’s site yourself with the CFSA seal.
- Legitimate lenders have no problem revealing their information such as a physical address. If any lender denies you this information they are probably not a safe lender to borrow from.
- Make sure you are dealing with legitimate lenders by browsing through the Better Business Bureau’s website to verify that your lender is not a scammer. This site will list any payday lending company who has committed a scam.
With these five tips for avoiding a payday lending scam, you should be able to avoid most scamming companies. If you think there is something off about a company move onto the next one. You do not need to borrow from the first lender you see online. Make sure you can pay back your loan as well so that you do not get sucked into the outrageously high interest rates which may trap you into a cycle of debt.
Related Links:
Even in the toughest financial situations there is always a solution. Some people find these struggles to be overwhelming and difficult to overcome so they dwindle in debt. When the stress becomes unbearable, some people just stop paying off their debts which creates a truly massive problem where interest accrues and your entire debt become a whole lot more costly. Reviewing your options are the only way that you can begin to start paying off this debt.
What Situations Make You Need Extra Funds Now
Many situations can come up. While you are worrying about making this month’s rent payment, you may need to go to the dentist for an emergency filling, replace one of your car’s tires or any other unforeseen costs. You cannot ignore these situations as they are relevant to your life and how you make your living. For example, you have to pay your rent because you cannot become evicted but you cannot avoid not paying to fix your car since you need it to get to work, to pay your bills. When you only have enough money to pay for one of these expenses where do you find the rest of the money to pay for the other necessary expense?
Solutions for Your Money Problems
The answer can be laying right in front of you. If you cannot charge these payments or you maxed out your credit line, your credit card will do you no good. You can write two checks but the most probable outcome is that one of them will bounce. These business people are looking for money as well so you can be assured that they will deposit the check as soon as they can. If the check bounces this could be disastrous for you on many levels. So what else can you do to solve this financial problem?
Payday loans are an excellent way to get money fast. A payday loan is a short term cash advancement which the borrower pays back in full plus interest on their next payday. Payday companies understand how frustrating it is to be without money and desperate to pay expenses. They know that credit card companies are cutting back issuing cards, limiting credit limits and raising payment costs because of their own profit losses. Payday lending companies also recognize the stipulations attached to bouncing checks. Therefore, they offer these short term loans that can be very advantageous and cost effective compared to their counterparts, credit card companies and banks.
Just because payday loans are basically fast money it does not mean that it is free money. You will have to pay interest on these loans which can range anywhere from 15 percent to 30 percent on the loan. So for a $100 loan, you may have to pay back $115 to $130 which is much better than paying $50 on a bounced check and still not having the money to pay for your expenses. When your pay check comes you can pay off your loan simply.
