Payday loans are unsecured personal loans provided by small financial companies. Most of the lenders providing payday loans are unorganized. Payday loans are strictly short-term loans that intend to provide financial relief to the borrower in case of emergency. Payday loans are expensive and can cause a serious financial crisis in case the borrower defaults the deadlines. Payday loans’ borrowers are prone to fraud as so many false companies providing easy finance online are available. It is important to scrutinize the payday loan lenders in order to ensure that the borrower is not harassed at the time of repayment by means of unfair means of recovery.
Parameters To Compare Lenders
The basis of comparison of the financial companies can be formed using certain parameters. The purpose of comparison is to safeguard the borrower from unfair means of recovery opt by the unauthorized lenders. This may lead to mental stress and financial loss to the borrowers. Generally, the lenders are compared on the parameters such as the ease with which they provide a loan, the rate of interest, a period of repayment and fees and penalties charged once the deadlines are crossed. Other factors such as authenticity of the lender, customer service availability, and association with the financial federations also needed comparison before borrowing the payday loans.
The first thing to compare while selecting the lender for payday loans is to check the authenticity of the company. Visit the company office in order to check the company profile and history. Check the number of customers satisfied with the company and compare with the other companies. Meet the customers in known and ask for a review in order to check the authenticity. Some lenders claim to provide online only services and ask the customers to visit the website to borrow the payday loans. High possibility of the company being fraud or overcharging the customers prevails with the online-only companies.
Check for the reputation of the company and search for the news or complaints about the company on the online consumer forums. Check for the license of the company to lend in your region. Companies having a license from the financial federations need to follow certain rules and regulations formed in order to protect the borrower from humiliation. The association of the lender with the state federations forces them to provide the borrower with an extended payment period without any extra fees if the consumer presents the proof of emergency.
Customer Care System
One of the best ways to compare the lenders providing payday loan is to check whether the company has any consumer care program or not. Usually, the companies having a consumer grievance system or consumer relation system are more trustworthy. Check if the company is having any customer care number or any online consumer relation forum or application. Know the way in which the company handles its consumers. If the company is not having any customer relation service avoid borrowing money from this lender as no help can be availed by the consumer in case of trouble.
Size Of The Company
Companies famous in the country or region are the most suitable and reliable option while selecting the lender. Compare the turnover of the companies and the net customer base. Never borrow money from a lender having small capital and customer reach. Such companies use unfair means to recover the loan amount from the borrowers, as they are always worried about their financial condition. Size of the company from whom you intend to borrow the payday loans matters a lot. Always select the borrower with a huge customer base, high turnover, and large capital.
Compare Loan Terms
The terms set by the companies largely affect the payday loans lend by them. Different companies offer different terms, which include the loan amount, period of repayment and rate of interest. The company size and reputation is not the only factor to be considered. Unfavorable terms offered by any company famous or infamous, small or big, affect the repayment of the loan, and may causes debts to the borrower. Consider the payday loan terms offered by various companies by keeping the terms parallel and finalizing the loan by matching the terms with the requirements.
Rollover Or Auto-Renewal
Most of the companies hide this malpractice in the term and is very difficult to be recognized by the borrowers. If the company recognizes the fact that the consumer is not able to manage the payday loans and consistently is in need of funds, they offer them bait in the form of auto-renewal or rollover. The borrowed amount is renewed after the deadline and the customers are told that this was done in order to protect the borrower from the debts and penalties. This is not an aid; it is a vicious circle that will trap the borrower badly.
Borrowing payday loans by comparing all the options available is a tedious job. Most of the borrowers accept the easily available option without comparing the terms and the company profile. This is mainly because the consumers are not able to decide the terms on which the comparison needed to be done. Check the size and turnover of the company with its competitors in order to choose the lender. Companies licensed by the local authorities are reliable and safe lenders. The student should never be confused by the terms offered by the companies who present the payday loans like student loans and try to trap the students vulnerable to such offers and deals.