Online Payday LoansHere are some things to know before you make a decision to take out payday loanAre payday loans helpful? They can be, if used properly. They are a convenient way to get cash fast if you need it, but be careful in how you use them, since they're an expensive way to get money. By law, payday loan businesses need to post interest rates prominently, so check them out and make sure you know what your responsibilities are before you sign on the dotted line.Here are some things to know before you make a decision to take out payday loan. First of all, they're expensive. They can have annual percentage rates as high as 200% or even more, sometimes approaching 1000%. Is there someone you can borrow money from instead? You might take an advance from your job, from your bank, or ask a friend for a short-term loan. Even if you borrow from you credit card, this is usually less costly than payday loan is. If you do decide to take out a payday loan, shop around for the lowest annual percentage rate, or APR. Go online and check out payday lenders to see which has the best rates. Because online competition especially is very intense, you're likely to get a better rate if you do your homework and choose carefully than if you simply walk into your neighborhood cash advance provider and take out a payday loan on the spot. Make sure the figures you compare are matches in terms of their characteristics. For example, some companies will say you have to pay them back $10 per week for every $100 you borrow. If you convert this into an annual percentage rate or APR, however, this means that you pay $521.43 in interest per year on a $100 cash advance. This makes your annual percentage rate 521.43%, much more significant than that "$10 a week" seems at first. Make sure you include any other costs or fees charged besides the APR as well, since these, too, add up. Again, before you sign, you should know exactly how much you are going to pay for your payday loan *in advance.* This means every single penny, so that you know exactly what you're facing when you have to pay back your payday loan. You should also make sure you know what's going to happen if you must roll over your loan. Finally, make sure you read the contract very carefully and if anything makes you uncomfortable at all, ask questions. You should walk out of that payday loan store with every single question answered and no remaining uncertainties. Be aware that some lenders will try to rush you through the signing process so that you can read the fine print, but don't let them. Make sure you read the fine print and even show it to someone more versed in financial matters than you if necessary, so that you know exactly what you're getting into. If you don't get your questions answered, simply walk away. You don't want to get into something you're not going to be able to get out of. A common practice of payday loans is called a "loan rollover." This happens when you don't have enough to pay back the loan in full the next payday. This is very expensive, because your annual percentage rate will shoot sky-high. If you must keep rolling over because you continue not to be able to pay the loan back, this only increases charges and interest rates. This in turn can put you deeply in debt. Therefore, make sure you borrow only as much as you can repay on the due date and nothing more. If you don't, you could be in trouble very fast. Most often, the longer your cash advances are, the higher your APR will go. Therefore, borrow not just the minimum amount of cash possible, but keep the repayment date as short as possible too. Before you sign your agreement, make sure you know what the exact duration of the loan is. Also make note of your due date. If you're new to this particular lender, go to the Better Business Bureau's website and check the business out to see what its reputation is. You can also go to your local Chamber of Commerce and check the lender out that way. You have every right as the buyer to make sure the lender you're working with is reputable. If you decide to go with an online payday loan lender, make sure that their site is secure. If you look at the URL in your browser's address bar, the beginning of the address should say "https://", instead of the traditional "http://" beginning. The "S" tells you that the site is secure. Most of these providers do use secure servers, but your information is in danger if it's not, so move on if this security measure is not provided. As with your local payday loan provider, make sure that you get full contact details and a working phone number. Also make sure you read the contract you are provided carefully. Before you agree to anything, again, make sure you read the fine print. In addition, check out their customer service and ask them about their customer service setup as well as payday loan policies and see what they say. As with your local provider, the online payday loan provider should give you a complete accounting of all charges and fees *before* you provide any personal data. You can call them and verify details before you decide to go ahead with the application. You should also make sure the print out all relevant details and read them carefully, so that you have a hardcopy in your possession should there ever be a discrepancy in what you were told versus what you are expected to do later. Payday loans can be a godsend if they provide you short-term help you need. However, you should be aware that you might get a better deal from one of the other sources listed, including credit card advances. Make sure you know what you're doing before you decide to take out a payday loan. If you do, make sure you pay it back as quickly as possible, to avoid financial hardship. This is the only responsible way to take out a payday loan. If you can't make sure that you're responsible, don't take out the payday loan. It's not worth it, no matter the current hardships you think you're facing. Tim Staines
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