Do Reputable Payday Loans Exist?

The idea of a payday loan is really tempting to many people, especially those with bad credit, but is there such a thing as reputable payday loans? Most people are aware that the majority of payday lending offices aren’t exactly trustworthy. Many of these offices fail to disclose to borrowers exactly what percent of interest they’re being charged, and sometimes the rates they use are actually illegal.

How to Find Trustworthy Payday Lenders

A person in search of reputable payday loans should do a few things first: Check to see if payday lending is legal in his state, and then check to see if the lending offices he is considering are licensed to operate in his state. Payday loans in Georgia and many other states in the U.S. are actually illegal, but this doesn’t stop some offices from opening up anyway in the hopes that they won’t get caught. Once the legalities check out, the next step is to contact the Better Business Bureau for any consumer complaints against potential lenders.

Understanding the Terms of the Loan

Borrowers should always familiarize themselves with the terms of payday loans they obtain. If a specific lending office doesn’t want to disclose all interest rates and fees, that should raise an immediate red flag. Shady lending companies often fail to provide details regarding loan terms – usually because they’re breaking a few laws. A company that is reputable should have no problem providing any information that is requested.

Short-Term Solutions Become Long-Term Problems

Before signing on the dotted line, a person considering a loan from a payday lender should ask himself if he really needs the money. The fact is that even the most reputable lenders operating in these circles are taking advantage of people who are already down on their luck. Getting the money is quick and easy, but even the quickest payday loan has to be paid back and then some. MSNBC News recently shared a few horror stories of well-intentioned borrowers who essentially became victims of the payday loan cycle, including one in which a woman discovered she was being charged an illegal rate of 800 percent interest. She was nearly ruined financially before filing complaints and putting a stop to the collection activity.