Friday, October 23, 2009

The Common Mistakes in Getting a Quick Payday Loan

A quick payday loan can be the best financial solution if the aspiring borrower knows how to handle it properly. It can bring instant relief to financial burdens in as quickly as an hour. You will just have to go online, find the perfect payday lender that provides the kind of payday loan that you need, and apply for the loan.

Once you have completed the application and you have submitted all the necessary requirements, you can expect your requested money to be deposited into your bank account in no time.

Like any other financial resource, a quick payday loan can also be a big burden. Despite the fact that it is only a short term loan that provides only small amounts of money, a mismanaged payday loan can result to a very huge debt. In order to prevent such unfortunate event, the aspiring borrower should be careful with his transactions. Below are some of the common mistakes that aspiring payday lenders should avoid committing.

Mistake No. 1: Not comparing payday loan offers

The reason why many people end up having huge payday loan debts is because they acquired the wrong type of payday loan. They might have availed of a fast-cash-advance that does not suit their needs and financial capabilities.

Each of these types is made to cater to particular types of borrowers. Some provide low fees while others do not. Some provide long maturity periods while others only offer short terms like seven days. Some require their clients to allow automatic debiting in bank checking accounts while other payday lenders will just settle for savings accounts. Some do not allow loan roll-overs while others permit the borrower to roll-over their loan up to four times. There are a multitude of varieties and aspiring borrowers should choose wisely for the best option.

Mistake No. 2: Being unaware of the process

If you want to avail of a quick payday loan, you have to be aware of all the processes involved in it. You have to know how to apply for it, how you can get your requested money, and how you repay the loan. You have to know the rules and regulations that are proposed by the payday lending company. You have to understand everything that is stipulated in your loan agreement. Being ignorant of these things will often lead to misunderstandings and magnified debts.

Mistake No. 3: Being ignorant of the law

Aside from the rules stated in the quick payday loan contract, the aspiring borrower should also be aware of the state laws that govern payday lending businesses. Note that not all states in the USA allow cash advance lenders . In fact, there are only thirty seven states that legitimized payday lending businesses. In these states, payday lending is regulated.

Before getting a payday loan, you have to know if there are any state laws that limit the maximum loan amount, the interest rate, the maturity period, the number of allowable loan extensions, and the maximum number of outstanding payday loans that an aspiring borrower can avail of. Being ignorant can lead to serious consequences.


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