Payday loan-how to find a reputable payday loan company on the internet.

Payday loans are short-term emergency loans with extremely high interest rates and fees and they must be paid at your next pay day. (Payday loan companies have appropriate dates listed on there websites for your convenience… )

Indeed, interest rates for these loans are so high that they should only be considered in extreme situations or if no other sources (bank loans, credit union loans, peer-to-peer loans, 0% or low interest rate credit cards, loan from family or friends) are available.

Requirements for applying for these loans are very simple, very basic information is required (18 years of age, not a military member, US citizen, current address, home or mobile phone number, employment, work phone number, direct deposit of your paycheck, checking account, and a driver’s license) and no credit check is necessary.

You can find a list of payday companies on the web.
There are literally 100’s of payday companies listed on the internet.

When choosing a payday loan company on the web one should consider following:

Are fees and interest rates disclosed/ listed on their web page?

Are terms and conditions posted?

Is a phone number for customer service listed? (If there is a phone number listed, call and check if it is actually a real phone number and someone answers it)

Remember: Payday emergency loans are for emergencies only, don’t make them a habit.

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Payday Loans danger

Payday Loans danger

Payday loans are short-term cash loans based on the borrower's personal check held for future deposit or on electronic access to the borrower's bank account. Borrowers write a personal check for the amount borrowed plus the finance charge and receive cash. Or, borrowers sign over electronic access to their bank accounts (by disclosing their checking account number and bank’s routing number) to receive and repay payday loans.

                                                                                                                     
Lenders hold the checks until the next payday when loans and the finance charge are due. To pay a loan, borrowers can redeem the check by paying the loan with cash, allow the check to be deposited at the bank, or just pay the finance charge to roll the loan over for another pay period (usually another 2 weeks).

Payday loans range in size from $100 to $1,500. The average loan term is about two-weeks. Loans typically cost from 400% up to 1000% annual interest (APR).

Payday loans trap consumers in repeat borrowing cycles due to the extreme high cost to borrow and the very short repayment term. Beside that, many borrowers are not able to cover their checks and that leads to bounced check fees from the payday loan lender and the bank. Returned checks cause negative credit ratings on specialized databases and credit reports. As a result consumers can lose bank accounts or have difficulty opening a new bank account if there is a record of "bouncing" checks used to get payday loans. Internet payday lending adds security and fraud risks to payday loans. There are many reports from borrowers about abuses and identity thefts. (Go to Google search)

Because Payday loans are so expensive the Federal Trade Commission published a list of alternatives to payday loans:

1. Consider a small loan from your credit union or a small loan company. Some banks may offer short-term loans for small amounts at competitive rates. A local community-based organization may make small business loans to people                                                                   

2. Shop for the credit offer with the lowest cost. Compare the APR and the finance charge, which includes loan fees, interest and other credit costs.

3. Contact your creditors or loan servicer as quickly as possible if you are having trouble with your payments, and ask for more time. Many may be willing to work with consumers who they believe are acting in good faith.

4. Contact your local consumer credit counseling service if you need help working out a debt repayment plan with creditors or developing a budget. Non-profit groups in every state offer credit guidance to consumers for no or low cost.

5. Make a realistic budget, including your monthly and daily expenditures, and plan, plan, plan. Try to avoid unnecessary purchases: the costs of small, every-day items like a cup of coffee add up. At the same time, try to build some savings: small deposits do help.

6. Find out if you have — or if your bank will offer you — overdraft protection on your checking account. If you are using most or all the funds in your account regularly and you make a mistake in your account records, overdraft protection can help protect you from further credit problems.

The bottom line on payday loans: Try to find an alternative. If you must use one, try to limit the amount. Borrow only as much as you can afford to pay with your next paycheck — and still have enough to make it to next payday.

To read: FTC –Consumer Alert go to: http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt060.shtm