Payday loans are an excellent way to receive urgent payouts in times of financial need. These short-term loans provide relief against promised repayment from your salary. However, payday loans can be used and abused like any kind of loan. While there are good payday loans, there are also bad payday loans that one should look out for.
It can sometimes be tricky to differentiate between a good payday loan and a bad one since these types of loans often come with high fees and varying interest rates depending on the lender. However, there are some things that you can do to determine whether you are about to enter into a good payday loan or a bad one.
It is important to do business with a lender that keeps their fees and interest rates as transparent as possible. These lenders will clearly disclose the total cost of the loan so that no surprises arise later. This total cost will include all forms of interest and fees, and this information should be provided in writing so that it can be referred back to later if need be. If your lender is not transparent about the fees and interest rates, then you might be in danger of entering into a bad payday loan.
Licensed And Regulated
The financial lending space is tightly regulated since many unscrupulous individuals out there would seek to exploit members of the public. Therefore, it is always a good idea to determine whether the lender is licensed and regulated before you sign on the dotted line. If they are, they will be obliged to comply with all laws and regulations pertaining to that particular kind of lending. This protects you and ensures that you are not being swindled somehow.
Reasonable Repayment Terms
A bad payday loan will offer you unreasonable repayment terms, inevitably getting you into trouble. When you agree to repay a loan on terms you cannot meet, it can cause you to face some legal problems. Therefore, good lenders will allow for reasonable repayment terms, requiring you to repay the loan in a way that won’t cripple you or undermine your ability to repay your other debts.
Before you enter into a payday loan arrangement, you should ensure that the lender with whom you are doing business is reputable. Check for reviews and ratings online to ensure the lender is fair and ethical. Again, this will protect you from any untoward activity and ensure that fairness, good service and legality prevail.
Reasonable Fees and Interest Rates
While payday loans typically have higher interest rates than regular loans, the interest rates may become completely unreasonable, even for a payday loan. Make sure that you compare the rates and fees against competitive lenders to ensure that you get interest rates and fees that align with market value.
To avoid getting bad payday loans and instead get a good payday loan, apply online at Better Than the Bank today. We are a reputable lender!