Protecting Yourself When Getting A Payday Loan

In states like Missouri, people have the option of applying for an online payday loan

. An online payday loan is a small loan that is basically secured by a personal check due on the borrowers next payday. While payday loans are easy to secure if you meet the lenders basic qualifications, there are many other things secretly declared in the fine print.

Logically, payday loans wouldnt be so convenient for borrowers if lending companies didnt earn the big bucks from this scheme. Now, if you really have no other options but to secure a payday loan, at least know what youre getting yourself into. Its best to be informed than to fall into the pits of eternal debt.

Payday loans are legal because lenders do not charge interest. Instead, lending companies charge fees. First, they charge around $15 to $17 as a loan charge. If you repay before the due date, some lending companies may charge an early repayment fee. And of course, if you dont make the payment on time, they charge a late repayment fee. And thats on top of the loan charge. Also, some lending companies earn extra money from charging customer fees.

Whats in the fine print varies with every company. A Missouri payday loan contract would be somehow different from a Mississippi payday loan contract. Whichevers the case, you should always, as with every contract, read every clause thoroughly.

Be careful not to give the lending company direct access to your bank account. Some Missouri payday loan companies ask for this so they can debit your payment from said account, and its agreeing to do so may put your security at risk. Giving them a postdated check is always better. And if you do issue a check, make sure that you have money in the bank. If you dont, the lenders as well as the bank will charge bounced check fees. Before you know it, youll be neck-deep in debt thanks to all these fees.

Finally, a few payday loan companies require collateral, usually car titles. The popular advice is to find some other Missouri payday loan company that does not require collateral, since many other lending companies dont.

by: Sofia Britts

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