How do I Choose the Best Long-Term Payday Loan?

Malcolm Tatum

A long-term payday loan is different from other payday loan options in that the repayment terms do not require that the principal plus interest be repaid within two calendar weeks of the receipt of the loan. This can be an excellent option for anyone who needs money to deal with an emergency, but is paid on a monthly rather than a weekly or biweekly basis. As with any type of paycheck loan, it is important to consider the terms involved with the long-term payday loan, including the rate of interest, the duration of the loan, and the rights of the lender to take collection actions if the loan is not settled on time.

Woman holding a book
Woman holding a book

With a long-term payday loan, the interest rate is one of the primary concerns. The goal is to find lenders who offer the best possible interest rates. Keep in mind that what may appear to be a competitive interest rate on the front end may not be the best option. Along with identifying the exact rate, take the time to find out how that rate is applied to the outstanding balance. This will make it easier to determine how much will be paid in interest by the settlement date, and allow you to choose the option that ultimately results in paying the least amount for the borrowed sum.

Along with the interest rate, make sure to look closely at all the terms related to any long-term payday loan you consider. Be aware of any additional fees or charges associated with this type of extended payday loan arrangement. Often, those charges are also due by the settlement date and may appear in the terms as either flat fees or stated in terms of percentages. As with calculating the amount of interest that will accrue over the life of the loan, also calculate the total of these fees and add it to the total that must be paid in order to settle the loan in full.

Do take the time to understand the rights of the lender when it comes to collections. Depending on local laws, the lenders may have the right to contact employers or spouses should you be late in repaying the loan, or if the check provided for payment does not clear your bank. In many instances, the lender has the right to take immediate legal action by turning the bounced check over to local authorities. While a long-term payday loan can be helpful in emergencies, don’t use this particular financing method unless you are sure the money will be there to settle the loan on the appointed date.

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