Payday Loans Online
Payday loan companies have been a standby and a big help to struggling people and families needing some additional cash flow until their next paycheck. In person facilities where people could walk in and get quick approval for a payday loan are nothing new. Now, however, many people are finding it more convenient to simply go online and get instant approval for one of these loans. The novelty of this method of applying for a loan has not been lost on lenders, both legitimate and predatory.
Today there is an epidemic of online lenders that are either not reputable or are not practicing ethical lending. Even the Better Business Bureau has been releasing warnings to the public on the potential dangers of online lending. Seeking payday loans online is not a bad idea, but giving personal and financial information to just anyone online is certainly not great planning or foresight.
While sharing personal accounting information is dangerous enough when the individual is not 100% certain of the legitimacy of the institution, there are other hazards involved in trusting in the wrong company. Some of the businesses offering payday loans online state that they are not required to follow the same licensing laws as traditional payday loan outlets. This extends to other areas as well including how high interest rates can go and guidelines on debt collection methods. Some of these firms are charging interest rates as high as 1000%. Some states have banned online payday loan companies altogether but that does not keep these institutions from operating within those boundaries.
One of the riskiest elements of obtaining payday loans online is that it requires the individual to input their personal banking account information. This gives the lender some control in terms of when and how much money can be withdrawn. It also makes it difficult to control how and when the loan is repaid. If there are not enough funds to make the payment, this can spiral the person into a pattern of late fees, overdraft fees, and higher interest rates. A simple payday loan can turn into a long term problem. As if that wasn’t problem enough, many people are complaining that this fraudulent payday loans online companies are not applying their payments to the actual loan but instead putting the money towards finance charges only. The disreputable lender is making two or three times the amount originally agreed upon and extending the life of what should have been a short term loan.
Does this mean that those needing quick approval and fast cash should avoid payday loans online? Absolutely not. It simply means that seekers must follow some basic guidelines to ensure they are working with a legitimate company before inputting their personal monetary information.
First, do some research on the website. A basic search engine inquiry could provide some revealing information. Companies known to trick or trap those seeking a payday loan will automatically have a negative Internet following. There is always more information posted online from dissatisfied customers than for those who don’t have any issues. These online reviews are the first, huge red flag that an online payday loan lenders is bad news.
If no information can be found about the company during an online search, that does not automatically mean the lender is reputable. No information could signal a company that is newly formed or that changes its name often to avoid being obvious about their deceptive practices. This means some more digging is in order.
First, check out the websites customer service or contact information. If there is not an immediate way to contact the company via phone or email, don’t risk it. If there is sufficient customer support contact information, take the time to call them. A company that either answers the phone right away, or returns a call within 48 hours, stands a better chance of being the real deal. Companies that are impossible to reach are best to avoid.
Check in with the Better Business Bureau as well to see if anyone has filed complaints against the online lender. When dealing with the lender, pay attention to what type of information they are asking for. A company wanted to loan out money is going to want to gather personal information from the individual. If all the online payday loan business is asking for is banking account numbers, then it might be time to move on to the next choice.
Trust your instincts when checking out payday loans online. If something sounds too good to be true or just doesn’t feel right, there are plenty of other institutions to choose from. It may take more time to do the research for those who want cash in a hurry, but avoiding a potential financial disaster certainly makes the extra effort worth it.