Features to Consider When Comparing Payday Loans

There is nothing wrong if you are living from paycheck to paycheck but a problem will arise the moment you need to pay for something beyond your current resources. If you need extra money but you have bad credit, there is still hope for you – payday loans.

Whether you need $1000 loan or $15,000 loan, the first crucial step is to compare the lenders. This is important because there are many online lenders. If you do not know the nuances, you will end up owing more than the initial amount.

Here are the features to consider when comparing payday loans:

Loan amount

The first thing that you should do is to check the loan amount. You must know that there is a state regulation that controls the maximum amount you can borrow. There are some lenders that do not approve you for the maximum –they will stipulate that you work with a tiered system.

This is not good. If you really need the money, at the very least you need to find a lender that does not require you to work with a tiered system. With this, you should take time researching the loan amount of a particular online lender.

Loan terms

In a payday loan, you need to pay it within your next paycheck or the end of the month. If you cannot pay the loan back, it is important that you try to renegotiate the terms with your creditor. You have to convince the lender that you are still serious about paying back.

When it comes to loan terms, it is wise to check the state regulations governing the loan term. This can help you renegotiate the term with the lender. However, you need to ensure that the lender works with the state laws before applying.

Processing time

Another thing that you should look into is the processing time. The beauty of online payday loans is quicker processing time. However, not all payday loan lenders are equally quick in processing the applications and disbursing the approved loan.

You should read some reviews before you apply or commit to an online lender. Since you need the money urgently, it can help a lot if the processing time is shorter – preferably within the day. Avoid other lenders that give access to money after a few days.

Interest rate

As much as possible, you should pick a lender with the lowest interest rate. Payday interest rates these days can be anywhere from 200 to 400%. This is a big thing. At the end of the day,  make sure that you really need it.

Multiple options

More importantly, you should look for lenders that provide several options especially if you have a history of bad credit. If you have a regular source of income, there should be enough options suitable for your need.

Final thoughts

Before you take this type of loan, you should consider your eligibility for other alternatives like credit unions, traditional bank loans, peer-to-peer and many more. Taking out a payday loan should be your last resort. Armed with the right knowledge and approach, you can survive any situation.