10 Useful Tips for Payday Loan Borrowers
Payday Loans can be a life-changing event for some, and others would rather avoid them at all costs. But if you’re in need of money fast then there’s no other option than going with one of these quick cash solutions! The best way to find out what type of lender is right for your situation? Here are some tips to help you as a consumer of such loans:
- Read the agreement carefully before accepting or signing it. Make sure that you understand all the terms and conditions of the loan agreement. There is usually a fee to repossess the car, and you may be charged with additional fees if the loan is not fully repaid on time.
- Keep your financial records organized and up-to-date so that it’s easy to find necessary information and calculate the amount of money you owe.
- If possible, pay off as much of your payday loan as possible within 14 days. This reduces the amount you owe, plus interest, fees and charges on top of the original loan amount.
- Beware of borrowing against your credit card limit, especially if it is already running close to its limit. You are likely to pay more in finance charges than the actual cost of the loan.
- Don’t borrow more than you can afford to repay on your next payday. You may find it difficult to pay the retainer and interest charges if you don’t have enough money to live on, especially if you’re already in a tight financial situation!
- Make sure you understand all borrowing fees for every payday loan company you work with.
- If you can’t repay your payday loan on time, contact the lender as soon as possible to negotiate another payment option. Remember that it is illegal for a lender to use threats or harassment to intimidate or frighten you into paying an account. If this happens, document what has occurred and file a complaint with your state’s consumer protection agency or licensing board.
- If you can’t repay the loan on time, consider seeking help from a reputable credit counseling service. Make sure that you will be able to afford the monthly payment before you sign up. A credit counselor may also be able to lower finance charges and interest rates if you’re struggling with a budget.
- If you have to take out payday loans repeatedly, consider contacting the National Foundation for Credit Counseling at 1-800-388-2227 or online at www.nfcc.org. The NFCC is an association of nonprofit consumer credit counseling agencies that can provide financial advice and assistance to consumers who need help with debt problems.
- Be cautious and don’t overuse payday loans. They are designed to be used only in the case of an emergency or unexpected financial hardship, not as a long-term money management solution to pay for everyday expenses.