There are many factors to consider before getting an online payday loan. Creating a checklist can guide you in deciding whether getting one is the best option for your finances.
You might be in need of quick cash to resolve some emergencies. But before taking the leap, consider asking yourself the following questions first:
- What are the lender’s eligibility criteria?
- Is the lender accredited or licensed by the state?
- What are the lending company’s customer reviews like?
- Does the lender report timely payments to the major credit bureaus?
- Are their debt collection practices in line with directives from the Consumer Financial Protection Bureau (CFPB)?
- Does the lender perform hard credit checks on borrowers' profiles?
- What is the total cost of the loan?
- How affordable is the loan payment?
- Do you have any payment plan that enables you to repay the loan as agreed?
Payday loans are short-term loans with high-interest rates. Depending on the loan amount, and APR charged on them, they are usually expensive. It’s therefore important to consider the total cost and if it’s worth it before taking out one.
It's equally important to read the terms and conditions of a loan before signing, which contain everything you need to know about the lender’s debt collection policies, how long it takes to fund a borrower, lending requirements, interest rates, loan amount, and payment deadlines.
Generally, you stand a high chance of getting a payday loan once you meet the basic lending eligibility requirements put out by the CFPB. To qualify for a payday loan:
- You must be at least 18 years old;
- You must have valid identification;
- You should have a checking account;
- You are able to provide some contact information, such as an email address or phone number;
- You need to offer proof of income showing you have a steady source of monthly income with a value of at least $800 in some states and $1000 in others.