Finding The Right Loans

A payday loan is essentially a cash advance on your paycheck that you will have to pay back with interest. A payday loan is a great way to get money quickly that you wouldn't have access to until the next time you get paid. Payday loans can be tricky, though, so you need to know how to get the loan process right.

1. Work With a Licensed Lender

When it comes to getting a payday loan, you will find a lot of companies that want to work with you. However, you should only work with a lender who is licensed to do business in your state. A lender who is licensed as a payday lender in your state will have to follow all the laws of your state that are in place to protect you. Getting a loan through a licensed lender will protect your interests.

2. Don't Use a Middleman

When you need a payday loan, make sure that you are working directly with a licensed lender. Do not work with a middleman. A middleman is an organization that will take your personal information and then charge you a brokerage fee to work with a payday lender. A middleman acting as a broker is not held to the same legal standards as a licensed broker. You are putting yourself in a compromising situation by working with a middleman.

3. Don't Accept an Excessive APR

It is true that payday loans typically have higher annual percentage rates than other types of loans, like a car loan or a mortgage. As you are getting the money fast and expected to pay it back fast, the APR tends to be higher. However, you should watch the APR rate that you are charged. If you don't pay the loan back immediately, that loan rate could eat you up. Look for a payday loan that has a fair, and not excessive, APR. A lower APR will reduce the amount of money that you have to pay back. 

4. Have a Repayment Plan

You need to have a plan for how you will repay the money for the payday loan and still have enough to survive. You are essentially getting your payday early, and when your payday comes around, you are going to have to hand over some of that check to the payday lender. You need to create a budget that allows you to pay back the lender and not get into further debt.

When it comes to getting a payday loan, don't work with middlemen and only work directly with a licensed payday lender who has to follow the rules of your state. Have a repayment plan, so you don't continue a cycle of debt, and look for a fair APR for the loan. 

Contact a local payday loan service to learn more.