Payday loans aren't just available at the pawn shop down the street; big banks also offer them. In this market for subprime loans, banks, credit unions, and financing companies all offer their services. There are also businesses that try to trick people. Often, these are run in other countries.
Who gives out payday loans?
There are thousands of places to get payday loans online. Many of them just handle applications or send them to larger financing companies. Since more than $45 billion in payday loans are given out every year, big banks like Wells Fargo, Citifinancial, and MBNA have gotten involved. You can also get payday loans from local and small subprime lenders who only do that.
Different Methods
When applying to an FDIC institution, the process can be more strict. Everyone knows that payday loans are risky. Larger financing companies try to get rid of some applications by asking for a higher income level and looking into the history of the applicant's checking account.
But there are payday lenders who specialise in small loans and only ask for identification, proof of income, and an open checking account. Online payday loan companies also let you apply without sending a fax, which means less paperwork is needed.
Not only do payday loan companies have different ways of applying, but they also handle payments in different ways. Traditional companies will ask you to write them a check with a future date that they will cash when you get paid. Online lenders debit your payment automatically. They will also send money straight to your bank account so you don't have to wait for a check to clear.
Identifying Scammers
Some companies that say they offer payday loans are really just trying to get your information. Most of these companies are in other countries, making it hard to go after them.
You can avoid these companies if you use common sense. Don't give your financial information to sites that promise to send you to other sites. Also, find out about the fees and ways to pay for the loan. Check out an offer that seems too good to be true. Get in touch with the lender to talk to a person. If they can't answer your questions about money, it's likely that they aren't real.
Finding The Best Lender
Be sure you compare lenders. You can quickly find the best rates and terms by doing research online. Also, get information about the lender's finances before you agree to work with them.
