The popularity of payday loans is steadily increasing, mainly due to a number of benefits. However, they are also characterized by certain pitfalls. From the outset, it is essential to understand that pre-payday loans are usually microcredit with low credit limits, which largely affects how they can be used effectively.
They are mostly used to finance short-term needs or sudden expenditures. If you are going to apply for a payday loan, you should know how these short-term loans work.
Even micro-credits can become expensive and need to be treated responsibly.
If you are going to apply for a payday loan, it is usually a non-bank loan. You should thus avoid questionable companies and seek only the best lenders . There are almost 90 licensed non-banking entities on the Czech non-banking market and it goes without saying that you will find companies of poor quality and literally stars among them.
The ideal loan should not only suit your needs, its provider should meet several characteristics. Here are 4 tips to consider when applying for a payday loan:
1. How long will you receive money for?
If you are applying for a payday loan will be just the speed of money transfer, one of the important parameters that will affect your decision making. After all, you are going to cover your acute or unexpected short-term costs, and transactions lasting several business days won’t help you out of trouble. Quick loans with a one-day settlement, ideally processed in a few tens of minutes, are the solution you should look for.
2. APR amount
The combination of the amount of interest and fees paid is another characteristic that should tell you whether it makes sense to deal with the offer of a non-bank provider or prefer to move on. Pre-payday loans are due in days – their APR is relatively high – but there are still significant differences between offers .
So why pay unnecessarily more than necessary? Loans with zero APR are a special group of pre-payday loans. This is the first free loan offered by many companies to new clients as part of their marketing strategy, with zero interest and no fees.
3. Does the provider’s offer match your life situation?
Generally, no one will require you to confirm receipts for microloans, nor will any liability be required. However, any lender, including pre-payers, must consult the debtor registers. For example, if you have had a problem repaying a loan in the past, such a record in your registry will last for several years.
Not every provider is willing to lend the client’s “no registry”. This criterion will be a filter that reduces the number of eligible creditors. If you belong to this group of applicants, you can still borrow, but you will need to look for a non-bank provider that offers loans without a register.
4. Positive reputation
If your acquaintances or friends have a positive experience with any payday loan provider, it’s great. They can then refer you to a serious provider who has helped them in the moment of a short-term loss of revenue or sudden expenditure. Before you make a final decision, it’s good to hear their suggestions.
Ideally, if their recommendations match your intent . In addition, you can take a fairly comprehensive picture of a lender by studying his website. It is advisable not to jump right after the first bid and do a short market research. Alternatively, save time and have your loans compared from one of the independent graders, which are numerous.