Many people who are short on cash have been turning to lenders of payday installment loans for financial assistance. However, before applying put things into proper consideration.
According to Matthew Fehling, BBB President and CEO, “Worried about a financial emergency, consumers often fail to take the time to understand how payday installment loans work. Most don’t realize they will not be able to meet the terms of the loan until after they’ve signed the contract, which often leads to a cycle of debt.”
Payday installment loans are short term loans designed to aid instant cash needs of people. These loans should be used for short term needs, such as paying for an emergency expense or unexpected medical bill. Payday installment loans are also timely financial resources when you need to pay an overdue bill urgently. Typically, payday installment loans help people with their urgent expenses and don’t drown them in debt. They are a great help to many people.
Consumers who claim to be indebted for several months because of a payday installment loan may have misused the money. When taking out any loan, consumers must keep in mind that a loan must be an aid and not damage financial health.
The Better Business Bureau (BBB) offers the following tips to help consumers make smart decision-making when applying for a payday installment loan:
1. Work with a lender on a trust basis. To do this, check out the payday installment loan company’s BBB Business Review for its rating, history of complaints and other information. For a list of local BBB Accredited auto title loan companies, visit www.searchbbb.org.
2. Verify the payday installment loan company’s business license. Most payday installment loans are regulated by state and federal laws. To verify the license of your local loan company, contact ADFI at 602-771-2800 or firstname.lastname@example.org.
3. Do not pay for any up-front fees. If a payday installment loan lender asks for fees before giving you any money, do not go through with the deal.
4. Limit the amount you will borrow. Borrow only what they can pay off with their next paycheck. Most loan companies allow you to “rollover” the balance for several weeks or months, but charge you costly fees.
5. Read and understand the fine print. Pay close attention to fees and consequences of non-payment.
6. Document all transactions. Some consumers report receiving calls from collections agencies years after they paid off a payday installment loan. These calls were simple errors, while others were attempts by scammers to collect a debt that you do not owe. It is important to protect yourself by having documentation of all the loans that you have paid in full.
7. Know where to seek help. If you feel your payday installment loan lender has committed fraud, taken advantage or violated the Fair Debt Collection Practices Act, you can file a complaint with:
· and with your state Attorney General
Payday installment loans are good resources for cash in times of urgent need. But remember, ignorance of the law is not an acceptable excuse. Be vigilant and make smart decision when applying for a payday installment loan.