Picking the right payday loan can be the difference between paying a one time payment and an on going nightmare of charges and non stop headaches.
I know that sounds a bit drastic but it really is true. If you are in the market to take out a payday loan you must understand the differences between brick and mortar loan companies and how they do business.
Lets take a look at the two and see how they work.
Brick and Mortar Businesses
These companies follow state laws and are mostly set up as a payday advance. You borrow a set amount and they add a fee and an interest charge. When the check comes due they present it to your bank and collect their money.
If you use this type of company it is recommended you make sure you do not roll over this loan, and on the first due date it is paid in full, period!
If you follow this advice you will be out the high charges but the loan will be satisfied and that will be the end of it.
Online Loan Companies
You must be very careful using these companies. The lure of fast cash can be very deceiving!
Most people do not understand when you sign up for these loans it is written in the fine print that you will be making only a fee and interest payment on the due date.
This will extend the loan amount plus new fees and interest for another period of time.
They get their payments automatically out of your checking account electronically and unless you inform them within 3 business days before the due date that you want to pay the loan off in full you will get hit big time.
Always read the fine print, and make sure this loan is paid in full on the first due date!
Now you know some of the differences in companies, and I hope this helps you choose wisely and pay your loan off quickly!