Research is key before applying for a payday loan, as applicants will want to apply to lenders they are confident will approve their loans. If you already use a bank that is familiar with your financial situation, you can talk to a loan officer there about whether your credit score is high enough to successfully apply for a payday loan.
Otherwise, it will useful to begin with local lenders, such as credit unions or local banks. Some online services, like LendingTree, offer free credit checks and walk applicants step-by-step through an internet payday loan application. applicants should exercise some caution when using online lenders, however, as a result of some are simply advance-fee loan scams. be careful for online lenders that promise payday loans to applicants with bad credit and state that they don’t need credit checks, as they possible are frauds.
You can research an online lender by getting in touch with your state's attorney general's office or department of banking or financial regulation, which can tell you whether the lender is registered to do business in your state. The Better Business Bureau also should have a record of any complaints filed against a lender.
When Should You Take Out a Payday Loan?
While getting a payday loan can supply you with a quick infusion of cash, it's not always the best financial option. The reasons for taking out a payday loan can vary widely, ranging from paying for a wedding to financing a big vacation, to consolidating debts into one payment.
To determine whether getting a payday loan is the best financial option for you, think through whether you are using the loan to pay for a need or a want. If you are underwater with monthly debt payments, a payday loan can simplify your debt by consolidating all of your loans into one that requires a single – and often lower – monthly payment. Debt consolidation can give some breathing room while you get your personal finances under control.
Other situations may be less clear. Is a vacation worth going into personal debt, or can you save the money first before taking the trip? On the other hand, a payday loan can help you manage the financial side of an unexpected medical emergency that you can't afford. Either way, payday loans can require you to pay large sums of interest, so consider carefully whether they are the best financial choice in your situation.
What to Do If You Don't Qualify for a Payday Loan
If you are turned down for a payday loan, there are steps you can take to improve your financial situation. Most importantly, focus on improving your credit score so that you can qualify in the future. Start by making sure to pay all bills on time and look for ways to make extra payments on existing loans. As you pay down loans and develop a history of responsible repayment, you'll become a more qualified candidate for a payday loan.
In dire situations, you may have other options. Family or friends may be willing to make short-term loans or gifts to help you out, and if you owe money to a hospital or other lender, you could try negotiating better repayment terms.
As you consider whether a payday loan is the best choice for you, think through your long-term financial plan. While getting a payday loan could help you through a tough time or help you pay for a big-ticket item, be sure to first determine whether it's the wisest financial tool to help you meet your goals.
Feature Source: Silvercashloans