An Informative Guide on How to Protect Yourself When Taking a Payday Loan

5Anyone with a steady income can easily get a payday loan to settle any financial emergency that they may be going through. Although these loans are readily available, you need to be careful when taking one to avoid getting entangled in so many loans that it becomes very difficult to rescue yourself from them. Many financial experts advise people against these loans, but sometimes they may be your only option out of a bad situation. During such times, you should do everything possible to protect yourself as you take a payday loan. The following tips and suggestions can assist you do that.

First, look for a licensed payday lender in your state. Licensing is very important to ensure that the lender complies with various laws that govern the practice. It can also be your ticket to avoid unscrupulous lenders who will do everything possible to fleece you. Once you have identified numerous licensed lenders, you need to understand their charges. Many lenders have posters showing their interest rates and any other processing fees and fines for those who fail to repay the loan on time. Therefore, you need to look around for one with the best rates so that it becomes easy to repay the loan. Other than just interest rates, look out for their admin fees and any other charges to ensure that you will not be faced to pay through your nose. Yahoo

To avoid being exploited by a payday lender, you should also be conversant with the terms and conditions governing the loan. This requires that you read the contract carefully to identify any malicious behavior from the lender. Be on the lookout for continuous payment authority option that many lenders use to give them authority to take money from your bank account. You also need to agree on the repayment period and the means of making the monthly payments. It is usually advisable to use a standing order or even manually write the lender a check for their monthly settlements. Furthermore, you should also know if you will have to pay any extra charges in case you manage to raise the entire amount and settle the loan before the agreed time. Some lenders can charge you a little extra for this.

In case you find it impossible to service the loan, you should always let the lender know about your likelihood to skip some payments. In the process, you also negotiate your way around penalties and other fines by pledging to continue with your payments as soon as possible. Failure to do this may prompt the lender to use debt collection services on you. Although these factors can help in finding your way around taking a green-touch payday loan, it is always wise to try and look for alternative means of financing when faced with an emergency especially if you fall in the large group of consumers who live from paycheck to the next one.