Now What? Selecting a Pay Day Loan Store
When you've decided to get an advance on your paycheck, pay day loan stores can assist you. However, what do you look for when choosing a lender?
Aren't all payday loan stores the same? They all work in the same way: you apply at a store, the payday loan store then uses your personal check as a type of collateral. Say you're borrowing $100 until payday next week. The companies charge a fee, usually $15 for every $100 borrowed. $100 is instantly given to you. On you next payday, come in and pay off your loan with cash. The pay day lender will then return your personal check.
But not all payday loan stores are the same. Here are some things to watch for:
- Some lenders charge an early repayment fee. You've paid your loan - early - and a penalty fee is added.
- If you're late on your payment, you might have to pay the entire fee again. Ask the store about their late payment policy.
- Some stores may have you pay a membership fee. Then, once you are a member, you pay the usual fees. If you're going to pay for a membership, make sure you get some perks. Otherwise, you can go elsewhere.
- Don't give up your car! Some cash advance stores will have you put up collateral, like your car title. If you miss a payment, you may lose your car. This is not worth the $100 loan you took out. Go to a store which does not require collateral - most stores consider your paycheck sufficient.
- When you've chosen a payday loan store, always, always read the lending agreement. If you don't understand something, ask for an explanation. Don't feel dumb for doing this - financial terms are hard to comprehend sometimes. Understand what it is to which you are agreeing.
- It pays to shop around. Competition is fierce for your business, so as the consumer, you need to look for the best terms and rates.
Most people need financial help in their lives. If you need money right away, take some time to ask questions. The difference between staying in debt and paying bills on time could be the payday loan store you choose.
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