There are many different payday loan companies and so if you are looking for one, it can be difficult to know how to choose the best one. There are a number of things though, that you can look at in order to decide which of them will be the best for you.
Interest – the interest rate is something which shocks many people when they are looking at payday loans. It is extremely high and this is because they have to cover their admin charges and risk within that interest rate. As the loan is so short term, the actual amount that you pay is not that much and so the interest rate can be rather misleading. It is better to calculate how much the cost of the interest will be, rather than looking at the percentage as this will allow you to see exactly how much you will have to pay. It can still vary quite a bit between different lenders though and so it is good to compare them.
Fees – there may be additional fees as well as the interest. Some loans will have set up fees, early repayment charges and things like this. Make sure that you find out what these are. If it is not obvious on the website then you could get in touch with customer services and see whether they can help you and let you know what all of the loan fees are. The website may tell you exactly how much you will have to repay depending on what you borrow with a calculator. This can be useful and should include all fees and well as the interest, but it can be wise and check just to be sure.
Charges – if you do not repay on time you will be charged extra money. It is good to know exactly how much you will be charged, just in case you are in this situation. You might think that you will be easily able to repay the loan, but if there are some with very similar interest rates, then it is worth checking this information and picking the cheapest one, just in case. It is also worth knowing as this could motivate you to make sure that you do repay on time as you will know exactly how much extra you will have to repay if you do not.
Repayment terms – it is also crucial to know what the repayment terms are. Most payday loans will expect you to set up a direct debit to repay the full amount owed on the day that you next get paid. However, there are some loans that now have several repayments so that the cost is easier to manage. You may prefer this option or you may rather pay it all off in one go and get the loan cleared as quickly as possible. It is likely that the more repayments you have; the more expensive the loan will be. Consider which will be the best option for you and see what loans have this option available.
Flexibility – it can be important to some borrowers that the lender is flexible with regards to loan repayments. Some might be less strict than others as to when the loan needs to be repaid. Some might like to repay it early if they have the opportunity and others might prefer to be able to pay it a bit late. There will normally be charges associated with late repayment but some might be cheaper than others. It is good to find out beforehand so that you know whether the loan is the right type for your needs.
Customer service – for some people it is important that they are able to chat to the customer service department and find out any information they want. Some might want to do this on the telephone, some by email, some face to face and others by live web chat. This might affect which lender you choose as they may vary in the way that they allow customers to contact them. You are also likely to want the customer service staff to be polite and friendly as well as knowledgeable and easy to understand. If you contact them before you take out the loan, then you will be able to find out what they are like and this should help you to judge whether you feel that they fit your requirements.
Reputation – a lenders reputation can be really important to some people. They may wish to talk to family and friends about their experiences of using payday lenders and decide whether they want to use ones that they have used or not. They may also want to look online at reviews to find out more about the lenders before they use them. There are various places to look as well, such as personal finance websites, blogs, message boards and social media pages.