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How do I Choose a Legitimate Online Payday Loan?

Article Details
  • Written By: Anna T.
  • Edited By: Melissa Wiley
  • Last Modified Date: 17 May 2018
  • Copyright Protected:
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    Conjecture Corporation
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If you are looking for a legitimate online payday loan, you should check to make sure the company has contact information listed, look for reviews on the company, and check to see if the company has a lending license or some sort of official accreditation. It might also be a good idea to ask people you know about the online payday loan company you are interested in. If your peers have had good experiences borrowing money from the company, then it is probably reasonable to believe that you will too. It is also probably a good idea to read all the fine print associated with your payday loan before agreeing to it because many lenders tend to hide negative aspects of the loan within the fine print, hoping you won't ever see it.

There are some online payday loan services that are not legitimate, and one of the primary signs that the company you are checking out isn't legitimate is usually a lack of contact information. Legitimate loan companies should have relevant contact information available, including an email address, telephone number, and a mailing address. If you cannot find this information on the website of the company you are checking into, you should probably search for another payday loan service. It may also be a good sign if you can see that the loan company you are interested in has an official lending license or has received some form of accreditation.

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You can also rely heavily on the experiences of others when you are looking for a legitimate online payday loan service. Doing an Internet search on the company in question may give you an idea of the experiences of other people who borrowed money from the company. When people have exceptionally bad or good experiences with any type of company, they are often eager to share them with others, so this is usually a good way to find out if a company can be trusted. You can also ask your friends and family if they've ever used an online payday loan service, and if so, which services they recommend. Taking advice from people you personally know and trust as opposed to taking advice from strangers on the Internet might be preferable for you.

Before you apply for an online payday loan, you should first be sure that you know exactly how the loan works and read the the fine print in its entirety before signing anything. Most online payday loan companies will offer you a certain amount of money and then withdraw the money you borrowed, plus their interest rate, when you receive your next paycheck. If you want to avoid costly fees from both the payday loan company and your bank, you will need to be sure that you have the funds in your account to repay the loan and interest on the date the company attempts to withdraw it. It is also important to keep in mind that most payday loan companies charge a very large amount of interest, sometimes as much as 600 to 700 percent. These companies may come in handy if you are in a bind and need money quickly, but borrowing from them frequently could end up costing you more than you realize.

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