PayDay Loans are now offered by thousands of companies, which can make it quite a challenge to know how to begin choosing between them. It is important to understand that there are lots of differences between these companies, and that knowing how to narrow down your search to the best lenders can make a big difference. Not all organisations that present themselves as providers of payday loans are actually direct lenders themselves. Many of them will pass your application on to one or more other companies. By going straight to a direct lender you can usually get a faster service and a better deal.
PayDay Loans are always for only a short period of time, so getting the money quickly can make all the difference. A good direct lender will be able to put money straight into your bank on the same day as you apply for a loan, often in as little as an hour. Payday loan providers who have to pass your application on to other lenders will inevitably have longer processes, and are unlikely to be able to guarantee a time frame for getting your money to you, as this will vary depending on which lender ends up actually providing the loan. As there is an extra party to be paid in such transactions, you can end up paying more for a loan through a broker. For this reason you tend to get a better deal by going to a direct lender.
Other things that can slow down the application and approval process are carrying out credit checks or having to fax through documents. You can improve your chances of a fast approval by sticking to a direct lender who does not require a credit check or the faxing of any documentation. Credit checks are really unnecessary for payday loans because they cannot give the lender much information that is actually relevant to this kind of borrowing. As long as the lender knows that you earn enough money each month to cover the loan and that you have a bank account that can be used for the repayment, they have all the assurances they need with regard to your ability to repay the loan.
Another very important factor which is relevant to all types of payday lending is that you must take care to apply only to well established and reputable lenders. The payday loan industry has unfortunately attracted a worrying number of people who simply see it as a way to trap people into debt through ridiculously high fees. The problem is to do with companies that deliberately apply very high penalties for any late payment or extension of the loan period. There are two elements to this really. One is the fact that some companies have these exploitative fees at all, but the other is that some people use payday loans for the wrong reasons, which is why the end up paying the fees in the first place.
Payday loans are not a way to deal with real debt or a gap between what you earn and what you spend. They are to cover unexpected emergency bills and expenses, which you should be able to recover from when you next get paid. If you are trying to cover a gap which will still be there next month and the month after, a payday loan is the most expensive way of doing it.
If payday loans are what you require, my advice is to follow recommendations for some of the best direct lenders and apply to several of them. This is an easy way to avoid any dubious lenders and it allows you to see what you are offered and accept whichever you prefer.
Read recommendations for the most reputable direct payday lenders and on the author's debt help and advice website.
K D Garrow has worked as a senior manager with significant financial responsibility for the last twenty years. His website offers free, unbiased advice on a range of financial issues including debt settlement, bad credit borrowing, bankruptcy, budgeting, etc.
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