Payday Loan Tip #4 – How to Avoid Getting Ripped Off
Jul 25th, 2007 by PDL
Putting to rest some of the negative stereotypes about the payday loan industry has been quite a priority for the legitimate payday loan companies in recent years. The industry, on the whole, is a legitimate one that provides a very regulated service to customers that are looking for a short term monetary fix. Though it is true that there are some companies out there looking to scam potential customers, it should be noted that those cheaters exist in almost every part of the business world. How do you tell the difference between the good and the bad while protecting yourself against scammers? You have to keep a few things in mind when shopping around for different companies.
Understand that getting a payday loan is going to require you to pay pretty steep finance charges. There is no easy way to get around that. Though it may look nice to see a company that is willing to undercut everyone else’s rates by a large percentage, this should raise immediate red flags. More times than not, the companies offering the extremely low rates are just trying to lure in customers for a scam. The legitimate payday loan providers will adhere to something close to the government maximum rates on payday loans. A breakdown of these rates by state can be found at this payday loan information website
Never trust any company that asks for a fee up front. You should never have to pay money beforehand when receiving a loan. The real payday loan companies realize that you are asking for a loan because you need money, not because you have it. Therefore, they will never ask you to pay even a small fee up front.
As far as information goes, you shouldn’t be the only one asking for information. Payday loan companies generally need a good bit of information from you in order to give you a loan. Though you likely won’t be asked to undergo a credit check, they should be asking for some proof of employment. If they don’t, then there is a good chance that the company is a scammer.
By using some of the resources on the internet, you should be able to get a list of many of the payday loan providers that are illegitimate and may try to scam you. From there, it’s important to just use common sense. If something doesn’t feel right, then it’s probably not going to be right. Always make absolutely certain that you feel comfortable with each and every aspect of the process. If at any time you cease feeling comfortable, then terminate the transaction immediately.
The United States Senate released information about certain companies that are looking to scam people. That report can be found at this United States Senate Payday Loan Report page.