Tips On Selecting A Suitable Payday Lender

Yara Zakharia, Esq.

At some point or another, most Americans feeling the financial pinch need a little help from their friends. Alternatively, many turn to businesses specializing in short-term loans. To cope with an unsuspecting event, an increasing number of consumers are finding it convenient and expedient to fill the monetary gap with fast cash by visiting a personal loan lender. With so many storefront and online payday lenders inundating the marketplace, it is only logical that consumers are at loss as to which offer best matches their needs and circumstances. Since personal loan lenders play a pivotal role during financial droughts, it is imperative that prospective borrowers proceed meticulously through the selection process. This will ensure that they do not fall victim to scam artists or fake loan providers.

To find a reliable and trustworthy payday lender, consumers should undertake the following steps and be on the lookout for these key indicators:

1. Research

Prospective clients should conduct a comprehensive research of the personal loan lender they choose. It is also advisable that they contact the Better Business Bureau to find out if any complaints have been lodged against the creditor and to verify the latter's legitimacy.

2. Licensing

The payday lender should be licensed and registered under state law. Preferably, it should be a member of the Community Financial Services Association of America; such certification confirms that it is a reputable lender. Consumers should not hesitate to ask a company about its license, and if the latter is either unresponsive or vague, borrowers should seek out another lender.

3. Reputation

A personal loan lender's prior performance and reputation should be given significant weight since these reflect on its abilities. An established track record speaks volumes on reliability. Prospective borrowers should seek out reputed payday lenders with an untarnished past record.

4. Clear and coherent website

A payday lender's website should be well-organized, professionally-designed and user-friendly. It should have impeccable grammar and spelling, and a Frequently Asked Questions (FAQ) page should be provided.

5. Fees

Consumers should pay close attention to payday lenders' fee schedule and ensure that there are no hidden fees or easily-overlooked fine print. They should beware of online personal loan lenders that charge application processing fees. It would be prudent for prospective borrowers to consult a legal advisor for purposes of reviewing the payday lender's interest rates, payback plans and fees.

6. Pre-approval

A personal loan lender's application should request banking, employment and personal information. It should also ask the applicant to provide an e-signature. A warning signal should flash when a payday lender pledges immediate approval on the basis of only a few questions or states that documents such as proof of employment or bank statements are no longer required.

7. Security

A reputable personal loan lender clearly posts a Security and Privacy Policy and safeguards its customers' personal data. Online visitors may check for the website's security by searching for the lock and key symbol. Moreover, they should look for the letters SSL (Secure Socket Layer), which means that the connection is secure, and that third parties cannot access clients' information.

8. Contact page

Payday lenders should furnish a Contact Us Page that contains their contact information (i.e. email address, phone numbers) and a form for communicating issues involving the application and submitting questions regarding the loan.