Validity of the LenderFirst, is the lender licensed to offer credit services, or did they just set up shop and operate as they wish? Most states within the US have legislation that requires credit companies, including those providing payday loans. Second, consider whether the lender follows the regulations of the Consumer Credit Acts of 1974 & 2006. This regulation protects consumers on their purchases. It also sets out how credit companies manage and market their products and services. Borrowing from a lender that follows these regulations gives you some level of protection against any predatory lending behaviors. Third, consider the size and diversity of the institution. Lenders with more loan products or tied to larger institutions have more credibility than smaller institutions. In addition, these types of lenders are more likely to follow the set laws and regulations on lending than smaller and upcoming lenders.
Terms of the LoanThe excitement of getting fast payday loans usually gets over the heads of most borrowers. But, unfortunately, many will forget to read the terms and conditions of the lender until it is too late. You certainly don’t want to be that sort of person. But, unfortunately, it only ends up badly, with you deep into debts with fines and penalties you cannot escape. And worse, court cases and debt collectors harassing you. So, read over every word of the terms and conditions, from the loan period to the APR, how much you are getting, and other finance charges. Ensure the fines and penalty charges are also clear before you sign any offer. In fact, you should ensure the lender provides you with a loan statement that states all these factors clearly. Failure to do this, you should think twice and look for other payday loan companies that provide you with this. That said, you also need to understand how APRs work. Calculate what you would owe the payday loan companies and assess your financial situation. It is important that you only borrow the money you are sure you can repay as stipulated in your contract with the lender. You also need to understand your state’s laws and regulations on payday loans. With some states regulating payday loan lenders, knowing what’s happening in your state ensures you do not fall for lenders offering higher APRs and charging over-the-top finance charges.
The Application ProcessOnce you are sure you are dealing with a valid institution and their terms are friendly for you, the next thing to do is consider how you apply for a payday loan with them. Yes, you can walk into a physical store and apply for a payday loan. However, a lender that allows you to apply for payday loans online is more convenient in this era. It saves you time and energy you’d otherwise waste driving to a physical location. Online payday loan companies are also more convenient for ease of access. Regardless of where you are, all you need is access to the internet, a computer, or a smart gadget, and you are good to go. Whether you are shopping for advance payday loans online or from a physical shop, knowing what to look for in a lender is important. First, it helps you get a payday loan from a regulated lender and not a predatory one. Most importantly, you will understand your terms and where you stand with the lender if you cannot repay the loan.
Choosing payday loan companies should be a significant part of your application. According to Consumer Advocates, payday loans are predatory. And, with little regulation on most lenders, a payday loan could land you into a pit of insurmountable debts. Still, there are some regulations in the industry, with some states imposing their regulations. Knowing how to choose a payday loan company can help you when in immediate cash access without falling for a predatory lender.
While all payday loan companies in the US require you to be a citizen, you also need to meet the legal age requirement. Therefore, most lenders will need you to be 18 years and above.
However, some states are placing their regulations for payday loans. Due to this, some states require you to be at least 19 years old to apply for a payday loan.
The identification document is for verifying your identity, age, and even your state. You will need a government-issued document, like your identity card, passport, or driver’s license. If you are in the military, you can also use your military ID.
Most lenders will also need your contact details. For example, some might need your telephone number and email only, while others might require a recent bill for proof of home address. Other lenders might require all of this information or more. Lenders require this information so they can reach you in case of anything.
While a payday loan is not like a traditional loan, lenders still want to know that you can afford to repay the loan. As such, you will need to provide proof that you are earning some regular money.
Some lenders do not limit how much you need to earn to qualify for their payday loans. Nevertheless, some payday loan lenders put a cap on how much you need to earn before or after tax. For instance, MoneyMutual requires a borrower to make at least $800 to qualify.
Before you apply for payday loans with any direct lender or marketplace, ensure that you consider the income requirements. This way, you can avoid disappointments after applying, hoping that your income amount doesn’t matter.
It is best to have a valid bank account. This is where lenders send your money once it is approved. In addition, a checking account, especially if you use it to receive your salary or wages, makes it easier for the lender to withdraw their repayments on the due date.
A credit score shows whether you are a good creditor or not. But, unfortunately, not everyone has an excellent credit score. Due to this, many people miss the opportunity to borrow from financial institutions. And, when one can access the funds, it comes at a higher cost than people with great credit scores.
Fortunately, some payday loan lenders still consider people with poor credit scores. However, your terms might be more unfriendly than if you have a good credit rating. As you shop for a payday loan lender, confirm their standing on credit scores and know where you stand.
Whatever requirements are there to apply for payday loans depend on the lender you are using. However, the above are some basic information you need to have ready with you when applying for payday loans. As you shop around, we encourage you to check the requirements for individual payday loan companies or payday loan marketplaces before you start your application.