A payday loan can help you get out of a short-term money jam quickly. But you want to make sure that a shady lender doesn't trick you. So know what your rights are before you sign anything.
Your Freedoms
Both federal and state laws say that payday loan companies must follow the rules. State laws will tell you how much you can borrow and how long you have to pay it back. Montana, for example, has a limit of $300 on cash advances, while Illinois has a limit of $1000. No matter where you live, the law will protect you in some basic ways.
Find out how much it will cost.
You have the right to know how much a cash advance will cost you before you agree to it. This includes both the annual percentage rate and the loan fees. This information will be on the lender's website or sent to you when you ask for more details. A loan agreement should also tell you about these things.
Find out how to pay.
You also have the right to know how the money will be paid back. This should be one of the first things you say on your application. On the website of a payday loan company, you can usually find this information in the "Frequently Asked Questions" section. If you want to avoid expensive late fees, you should pay back the loan as soon as possible.
No Danger
Payday lenders can't threaten you with jail time if you don't pay back a loan on time. You could be taken to civil court, where your wages could be taken or a lien could be put on your property to get you to pay back the loan and court fees. Some states don't let court costs be taken from people.
State Privileges
As a borrower, you have more rights in some states. For example, in Washington, you have one day to change your mind and get out of your payday loan. But before you send an application for an electronic money transfer, you should really think about your choice. Find out about the laws in your state about payday loans by going to the department that deals with money matters.
Do some research on the company before you agree to work with it. Ask them about their prices and how you can pay. You can use this information to find the best deal by comparing it with several companies.
