Be Prudent With Payday Loans
Payday loans are becoming an increasingly popular way of meeting sudden and unexpected expenses. However, it is important that one exercises extreme prudence before taking a payday loan as it may land you in a debt trap. Let’s look at some of the important things that one needs to consider before availing a payday loan:
> To begin with always try to secure other debt options before you finalize a payday loan. It is important to remember that payday loans are extremely expensive to manage due to their high Annual Percentage Rate which varies from 300 to 1000 percent. Therefore when in need, try lending money from your family, friends or employer before going for a payday loan.
> Determine the amount that you are actually capable of repaying on the next payday. Never take a cash advance of an amount higher than what you can actually pay back including any charges or fees. It is advisable to get the loan of the remaining amount from other sources. This is important because in case you have to roll over any amount to the next payday, you will have to pay much more than you borrowed as many charges like late fees etc. are levied on the loan amount.
> Do not apply for multiple payday loans at the same time as you can end up getting rejected by all lenders. It is important to know that the banks and lenders have access to a database for tracking consumers that helps them to know the lending history of the borrower.
> It is important that you go through the approval norms of a lender very carefully before deciding to apply for a payday loan from him. This is because the chances of getting a payday loan are reduced with every rejection. So it is better to apply for loan at a company with criteria that suit you, than to get rejected by one and reducing your chances of getting loan from others as well.
> Before applying for a payday loan online, it is important to analyze the website of the lender to find out its authenticity. Determine whether the website of the lender looks well organized and professional or not. Look for proper guidelines and appropriate information on the website along with a complete FAQ. Also look for a proper SSL certificate on the website’s application page. The SSL certificate is required to make sure that the data being entered on the website is being securely transmitted to the lender. The websites with SSL certificates have web addresses beginning with https, not http. Besides this, you will also find a ‘lock’ symbol in your browser for secure pages. In case the lenders website does not meet these criteria, do not apply for loan from that lender.
Keeping all these points in mind will help you in making the right choices regarding your payday loans. Last but not the least, do remember to duly clear your debt of your payday loan in time so as to avoid falling into a debt cycle.