Probably, this isn’t the first time you heard about payday loans. But, if you want to know more about it, you’ll get what you need to consider before applying for payday loans online.

Payday loans can save your day when you’re running out of your budget to pay for utility bills, rent, or you need to repair your roof. For unplanned expenses, payday loans can be a great remedy.

What more is that applying online can give you more ease and convenience. You don’t have to photocopy your documents or take the long queue for the application. It only takes a few minutes up to several hours to wait until you get the cash you need.

What you need to know about online payday loans:

Sometimes, when you’re hopeless because you don’t have money, you fail to ask questions. All you want is to find an immediate solution to your problem.

When someone offered you of getting a payday loan, you didn’t hesitate. You simply go to a website of a lender and fill up the application without questions asked.

However, you shouldn’t forget that you must only deal with reputable online lenders. There are a lot of lenders on the internet today. Everyone promises a solution for your financial hardship.

But, you shouldn’t jump into anything without looking at legit reviews out there. Know the information about the lender you’re interested to apply to.

What is a payday loan?

Payday loans are short-term, high-cost loan that has to be paid on your next payday, according to the Consumer Financial Protection Bureau (CFPB). Anyone can apply to a storefront or online lenders.

What are its features?

• It is a small loan that usually starts at $500. It depends on your area. Some states in the United States or provinces in Canada offer different loan amounts.
• You pay it by either issuing a post-dated check or an authorization to electronically debit the amount from your bank account or prepaid card. In case you fail to repay on the agreed date, lenders can withdraw the amount from your account or encash the check.
• It is paid for one-time-only usually on your next paycheck. Oftentimes, the due date is two to four weeks from the date you received the loan.
• You receive the loan through your bank account or deposited to your prepaid card or given as a check.
• Lenders do not consider your financial situation that may affect your capacity to repay.

Not all features are the same so you must know and talk with the representative first before signing the agreement. Some lenders allow a rollover or renewal of your loan where you only pay the fees and continue with the loan. Others may permit a loan restructuring where you can pay in installments over a certain period of time.

How to pick the right lender?

Knowing that you’re dealing with a legit lender can avoid more problems. When looking for lenders online, you need to watch out for red flags as well as their reviews.

Not all you see online is valid. Make sure that you’re looking at legitimate reviews from their clients. You can check the status of their business or complaints at the U.S. Consumer Financial Protection Bureau (CFPB). The bureau files the complaints that these lenders receive online in a period of 15 days.

You can also ask people you know who have used a particular lender. Ask their experience or if there are any issues they encountered with them. The least you don’t want to happen is for you to become a victim of scam lenders.

The more you researched and the valid your sources, the more confident you’ll be when borrowing money. You can also watch for red flags or signs that they are operating illegally.

Some of these signs include asking you of upfront fees before they approve your loan, asking a payment via wire or Western Union, and promising you of guaranteed approval. You need to be very careful if you see these signs because there are chances that they are making more money than they should.