Despite how popular payday loans have become in recent years, there are still a lot of things that people get wrong about them. If you are currently on the fence about getting one of these loans, you need to know the facts. Once you learn more about payday loans, you will be more inclined to get one when you need quick cash. These loans can be very helpful when you are having cash flow problems and need to pay for a crucial expense right away.
- Security
Some people believe that you cannot get an online payday loan without sacrificing the security of your personal and financial information. The truth is that pretty much every private lender’s website is 100% secure. These payday loan businesses use state-of-the-art encryption to protect their customers’ details. You won’t have to worry about getting your identity stolen by some malicious hacker. While it might be technically possible, the chances of it happening are extremely unlikely.
- Interest Rates
Another common misconception about payday loans is that they always come with absurdly high interest rates. If you are willing to shop around for a bit, you can actually get a pretty good deal on one of these loans. The more time you spend getting quotes, the easier it will be to do this. There are some lenders that might charge you too much, but it’s fairly easy to get a loan with a decent interest rate. You also have to keep in mind that your credit can affect the rate you get with your loan.
- Repaying the Loan
Some people think that repaying a payday loan is incredibly difficult, but it’s really not. As long as you know when the money is due and don’t take out more than you need, you will be fine. No lender will allow you to borrow more than you can afford to pay back. You should consider opting for automatic repayment. With this arrangement the money will automatically be taken out of your checking account when the loan payment is due.
- They Are Only for the Poor
Payday loans have gotten a reputation for being the “poor man’s loan”, but the truth is that they can benefit virtually anyone. Even those who do not have bad credit often choose to get a payday loan because of everything they offer. There are many great deals to be had, so you will need to keep that in mind.
- Shady and Unscrupulous Lenders
Not all payday loan lenders are shady, and in fact most of them are perfectly legitimate and quite reasonable. You will most likely find these lenders to be more flexible and amenable than most banks. This is just one of the many reasons that so many people have started taking out payday loans. You definitely need to research your lender options, but there are plenty of great businesses out there to choose from.
- Fees
If you think that all payday loans come with hidden fees, think again. A small number of lenders may charge hidden fees, but most do not. As long as you take the time to find a reputable lender, you shouldn’t have to deal with this issue. Always take a close look at the contract before signing so you can see all of the fees you will be required to pay.
- Guaranteed Approval
You have probably seen some advertisements from payday loan lenders with the phrase “guaranteed approval”, but it’s just not true. No lender can honestly guarantee approval for every single applicant. You should always avoid lenders that use this phrasing on their websites or in their advertisements. It is pretty easy to get a payday loan, but your approval can never really be guaranteed. It is important that you keep this in mind so you can manage your expectations.
- Regulations
It is a common myth that payday loans are not regulated at all. While it is true that these regulation laws are fairly new, they are in place. This means that you won’t have to worry about getting ripped off or scammed. These lenders follow very specific laws and guidelines laid out by the government. The regulations that govern payday loan lenders aren’t the same as the ones for banks, but they do still exist.
Payday loans are not for everyone, but you shouldn’t avoid getting one because of misconceptions or misinformation. The truth is that these loans offer a wide range of benefits for a variety of people. If you find yourself in need of money for any reason, a payday loan can be of great help. Whether you need to pay for a car repair or just catch up on some bills, these loans offer an excellent overall solution to your financial problems.