Are you considering online payday lending for financial help?
Payday lending is often a useful type of lending for those who need immediate cash but don’t have their paychecks yet. It’s vital for emergency purchases, like medications. Today, you can find many payday lenders who allow online transactions.
Before you pick an online payday lender, learn the best ways to determine their validity. In this guide, we’ve made a list of the top qualities of reputable online payday lending companies.
1. A Trustworthy Online Payday Lender Is Transparent
The average American has a personal debt of $38,000, excluding home mortgages. While most don’t want to get into further debt, unexpected events can push them to do so. One of the quickest ways to get a small amount of money is to apply for a payday loan.
When you shop for a payday lending company to borrow from, focus on the transparency of a lender.
When you buy bread from the grocery, you’d want to know some key details about it. You want to know about its manufacturing date, expiration date, and ingredients. Not looking into these things can harm your health, even if you don’t experience any symptoms at first.
The same applies when you’re shopping for loans. You want a lender that is transparent with their interest rates, fees, and policies. This way, you’d know where your payday money will go when it’s time to pay back the loan.
2. They Aren’t Afraid to Show You Their Business License
Having a license is a necessity in business. It’s a mark of a business’s authenticity. If you don’t check a lender’s business license, you’re at risk of being a victim of fraud.
One way to ensure that a lender is legitimate is to ask for their business license. Watch the reactions of the lender. Online, you can read a lender’s hesitance from how long it took for them to reply and their choice of words.
The question now is, how will you know if a lender’s business license is legitimate or not? There are many ways to double-check. You can check official sources, like the issuer of the license.
3. They Won’t Let You Take Several Loans at a Time
Many states in the US limit the amount of money you can borrow in one loan. This legal lending limit aims to protect you and the lender. It promotes diversification of loans and ensures everyone gets access to a lender’s other loan services.
However, to get around this limit, some lenders issue several small loans to the same client. It’s difficult to trust lenders who avoid the law or try to bend the rules for their gain. Remember, the law is there to protect you and other clients, as well.
If you want to ensure a smooth and trouble-free lending experience, go to lenders who follow the law.
4. They Are Direct Lenders
Beware of the online lenders you consider borrowing from. Some only work as middlemen, focusing on “lead generation.” In other words, they will take your data and sell it to the highest-bidding payday loaning company.
Before that, they will lift your name, address, and Social Security Number from the loan application first. A reputable online payday lender will work directly with you. When you search online for payday loan services, include the keyword “direct lender.”
You can also look for these words when you visit a lending company’s website. According to law, lead generators must let their clients know that they aren’t the ones loaning the money. To get clients to trust them, they’ll bury this information in the fine print.
5. It’s Easy to Find the CFSA Seal
CFSA stands for Community Financial Services Association, the trade group for small lenders. To be specific, the CFSA includes state-licensed small-dollar lenders. All its members must abide by a set of “best practices” that will protect their consumers.
A company with a CFSA Seal doesn’t have harmful or false advertising. It will also maintain the client’s privacy by preserving your personal information. Finally, all lending companies with CFSA approval follow all state and federal laws.
This seal is the best guarantee you have of the quality and legitimacy of a lender. They’ll show complete transparency on the costs of the loan you want. Considering how high the interest of payday loans can be, you must ensure you don’t pay any hidden fees.
6. The Lender Is Clean in the Federal Trade Commission
You can also call the number of your state’s Attorney General. The Attorney General enforces civil rights and helps victims of consumer crimes. His/her office will investigate a money lender you’re concerned about.
When you contact the Attorney General, you can ask about the license of the lending company. You’ll also learn of the records of any complaints against the company. Often, checking the Attorney General’s website is enough.
If you want to be extra sure about a lender, you need to be willing to make some calls. This can include contacting and learning the contact number of the Federal Trade Commission or FTC. The FTC strives to prevent unfair methods of competition in commerce.
7. Reputable Payday Lenders Check Your Data
A majority of US workers depend on their weekly paychecks for survival. A survey found that 74% of all employees in the US live paycheck to paycheck. Moneylenders know this and will check your financial background before issuing cash advances.
You know that a lender is legitimate if the company checks your financial capacity first. Checking clients’ finances will help them know if the clients can pay them back in time. It’s their way of protecting the company.
In a way, it’s also a way of protecting you. If a payday lender refuses your business, you may have terrible money management. This will keep you from getting buried in more debt.
Find a Trustworthy Online Payday Lender Now
We hope you enjoyed reading about the top qualities of a reliable online payday lender. We also hope you now understand what you need to look for in a moneylender. Feel free to share this with family members or close friends who may need funds on short notice.
If you’re looking for a lender who has all the qualities stated above, check us out by visiting our contact page.