When you seriously need a payday loan, you are probably in an emergency and do not have the time read through every details of the payday lender. This can lead you to some serious problems when you finally find out the terms and conditions of the lender you have borrowed money from. It is always wise to find out more about the potential lenders you want to work with and what are the experiences from other people who have borrowed from them.
1. All Hidden Fees
APR or Annual Percentage Rate is probably one of your key concerns and you should almost always get one with the lowest fees but you must also look at whether the payday lender imposes other fees on you when you are unable to pay or do not pay on time. There are so many people who just ask what is the fee for taking a $100 loan and the answer will be “it is $15 for every $100 loaned”. That sounds like a fair statement but what about the rest of the fees that could happened to me? These are the hidden costs of taking a payday loan which is the reason for the horror stories that you hear about in the newspapers.
Late payment fees are fees that the lender impose on you when you are late on your payment by a day. These fees can be as high as an additional $15 per $100 on top of your original loan so you must be aware of the lender’s policy. In California, the lender can only charge a maximum 15% fee on you, which must include the late payment fees.
Roll over fees are another area you must be aware. Does the company charge you a roll over fee just to roll the loan to another loan period? This will hurt you a lot if the company impose a high roll over fee and you get into a situation of multiple roll overs because you cannot afford to pay off the loan. You should always find a lender with the minimum roll over fee or zero roll over fee.
Next you should always email the lender to find out what are the other fees that they are have? what about a bounced check fee? What about an initial loan fee or a admin fee? There can be so many hidden cost because these payday companies are under a lot of scrutiny by the government and they have come up with innovative ways of making money from us borrowers. You must understand all the fees before you take up the first loan.
And after looking at the numbers, there are two other easy tips you want to use to make sure you are dealing with a real company that will not be scamming you.
2. Are They a Scam?
I would google for the term “payday company name scam” to check whether there have been people who have been scam by this payday loan operators. I would definitely read what happened to the person who have reported a scam because it could either be genuine or even fake. In the payday industry, it is common to find a lot of unhappy people because a lot of payday customers are people in situation whereby they may not be able to pay and they are liable to just say they have been scammed. What is important is to understand the context of why they say the payday loan company is a scam. But of course if you see a tonnes of search listing showing scams, you would do better to choose another company.
Testimonies by other borrowers is an important clue on whether the company is a scam. But it is also difficult to find many people who are willing to tell the world that they are a “happy payday loan customer”, so you should ask friends whom have been in a similar situation or search for reviews of payday loan companies or blogs who talk about payday loans.
I am constantly looking out for people who are in a similar situation as me before and if you have a story to share, just email me on this blog and we can share your story (whether bad or good) to the everyone so that others can either benefit or stay away from the crooks. I will not disclose your identity of course; I can understand that you would definitely not want your colleagues to know about you using payday loans.
3. Will They Harass You When You Do Not Pay On Time?
Typically friends will tell you how good a particular payday loan service was if they had managed to pay off the loan on time. But what if you do not pay off the loan on time, what will the experience be? We ought to find out whether the lender obliges to the laws (e.g. California Department of Business Oversight) and refrain from harassing the borrower. In California you can call www.dbo.ca.gov at 1-866-275-2677 to find out whether this particular company have a large number of complaints regarding their “customer service”. Of course any large companies will have people complaining about their service and if the number of complaints are small, you do not have to worry much. But if there is a consistent pattern of complaints, you better scram.
I also would google for the term “payday company name harassment” to see whether there were anyone who had experienced harassment from these payday lenders. If there are none, great. If there is one or two, it could either be genuine or it could be a competitor trying to defame this company. if there is more than 10, you better scram.
i also would call the company and talk to the customer service representative. If the call is picked up by a real person who is knowledgeable about the loans and application process, that’s great. If the person behind the call does not even know which company you are referring to, then it could be that the payday lender has outsourced their customer service does not pay attention to their customers/borrowers.
These are three easy tips that I used previously and i would definitely recommend anyone who needs a loan to at least go through the above tips before getting any loans from anyone. There are a number of reputable companies who will loan you cash but there are also many whom are just scams. I always advise everyone to tread carefully when you are in need of cash. And as always, take a payday loan only if you are really unable to delay the expenditure or cut back on your spending.