The Payday Company - Things To Look For To Avoid A Shady Payday Loan Lender
Written by: Carrie Reeder
Payday loans aren't just found at your local pawnshop; large
financial companies are also in the business. Banks, credit
unions, and financing companies offer services in this subprime
lending market. There are also companies that conduct scams.
Often these are operated overseas.
Who's Offering Payday Loans
Online you will find thousands of payday loan companies. Many of
them simply process or refer applications to larger financing
companies. With over $45 billion in payday loans being processed
annually, large financial companies, such as Wells Fargo,
Citifinancial, and MBNA, have become involved. You will also
find regional and small subprime lenders who focus solely on
With FDIC institutions, the application process can be more
stringent. Payday loans are known to be high-risk. Larger
financing companies try to screen out some applications by
requiring higher income levels and researching checking account
However, there are niche payday lenders who only require
identification, a source of income, and an open checking
account. Online payday loan companies also have faxless
application, requiring less paperwork.
Besides application differences, payday loan companies also
handle payments differently. Traditional companies will require
you to write a postdated check, which they will cash on your
payday. Online lenders debit your payment automatically. They
also wire money directly to your account so you don't have to
hassle with waiting for a check to clear at your bank.
Some companies identifying themselves as payday loan companies
are actually fishing for your information. These companies are
usually located overseas and are difficult to prosecute.
Good sense can protect you from these companies. Don't hand out
your financial information to third party sites who promise to
refer you. Also look for information on finance fees and payment
options. If an offer seems too good to be true, check it out.
Contact the lender to speak with a representative. If they are
unprepared to answer your financial questions, chances are they
Finding The Best Lender
Be sure you compare lenders. By researching online, you can
quickly find the best rates and terms. Also, request financial
information before you commit to a lender.
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