It used to be that to get a payday loan you had to go to one of those shops in the strip-malls and sit in a smoky waiting room with many others. There was a definite stigma attached to such loans and they were associated with underworld characters and were literally to be avoided at all costs.
Fortunately this is no longer the case. 2004 saw entire online companies spring up solely to administer these loans. Now the entire process can be completed in minutes from the privacy of your computer.
Unfortunately, as with any innovative ideas come the scammers. Hundreds of "payday loans" websites have popped up, claiming to offer the best deals. Most of them charge excessive rates for even the smallest of loans. Some of the other problems are:
• Charging loan application fees (NEVER pay a fee to apply for a loan)
• Excessive loan "roll-over" fees
• Hidden charges
• Zero help or customer service
Many of these SCAM sites won't even respond to customer requests. Eventually they get shut down due to too many complaints, or the State Attorney General forces them out of business. But the borrower is already locked into a bad deal, and the SCAMMERS just open another payday loans site under a different name in a different state. It's definitely a classic case of "buyer beware".
That’s the down side of payday loans but, payday loans can be a real life-saver if used correctly and responsibly.
If you can stay away from the SCAM websites, and remember that payday loans are meant for short-term emergencies and NOT for long-term solutions, then they can really be a life-saver.
When looking for a payday loan company, these are the attributes you should look for to satisfy the minimum requirements:
• Well organized, easy to navigate sites.
• Helpful resources available for newcomers.
• Short, 1 or 2 page applications that can be completed in minutes.
• No application fees.
• No credit checks.
• No hidden charges.
• Bad credit or bankruptcy not a problem.
• Loans deposited into checking account the next morning.
Obviously the most important thing when considering a payday loan is the interest rate because this is the real sting in the tail. Make sure you understand the interest charges and be sure to query the calculation if you are not sure.
In closing remember to never enter into any agreement without reading the contract thoroughly and making sure you understand all the relevant terms of the loan. The contract that you sign is a legal document and can be enforced in the courts should you not follow the terms.
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Payday loan fees: tax deductible?
By: Fran1942 | 25-01-2008
Are the high interest loan fees tax deductible? Thanks.
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