For one reason or another, an individual can find him/herself in need of short term borrowing. Maybe your car broker, you need a treatment or you have to travel abroad, whatever the reason might be there are several options one can take in a similar situation. While there is a broad range of borrowing vehicles that can secure you the funds in a fast easy manner, it is key to keep in mind that they will also request a high credit score.
Chances are that if you need a fast loan for a small amount, your credit score might not be the best. Take into consideration that even though this might solve your current situation, it can also put you in an even worse position if the loan is not handled appropriately.
PayDay Loans are considered by many as salary loans or cash advancements. The idea behind them is to secure fast or instantaneous lending with an extremely high interest rate. This will compensate for the risk taken by the firm and it will also provide you time for you to repay your dues.
The overall problem of this type of borrowing is that it is still an unregulated market where providers utilize many different methods to remain outside of the law. It is fairly common to see companies operating in the grey zone of the market, this allows them to discovery any regulation, making them risky lenders.
Even though it might sound a little bit exaggerated, but you can find many experts referring to this type of loans as worst than borrowing from the mob. When you ask for a financial institution like a bank to lend you money, you can be certain that even though you might have to deal with hard collectors. It is nothing compared to the harassment level that some of these companies may incur.
After saying all of this, it is important for anyone to understand that this type of loans may truly act as a savior in moments of extreme need. The key is to be as punctual and responsible as possible for the payments. If you are planning on repaying in 3 months, try to do it in two if possible, it might be hard to save the money but it will be worth the sacrifice to be out of the debt as soon as possible. These are some of the companies that no one should expose to doing business with.
Please note that while the overall market is followed by a bad reputation, it is important to understand that there are also legitimate companies with the interest of helping individuals in need. They are not the big majority but nevertheless, they exist. In this article, you will see some of the very best names when it comes to payday loans currently offering their services in 2019.
Just like any other financial instrument or vehicle, you should take your time to review and analyze all the available options before making a decision. The market is pretty broad, so you should try to read as many reviews as possible in order to build a case for one specific provider.
What are the Pros and Cons of Getting a Payday Loan?
- Easy Application: One of the best aspects of payday loans is being able to apply easily. For most providers including the legitimate ones, the overall process will be fast and straightforward. It is very rare to see individuals being rejected for their requests. While some of these firms offer branches where you can request the loan personally, they also offer for online applications. If you are in extreme need of the money we recommend going directly to a branch as it tends to be the fastest path.
- No Credit Check (Most Cases): While most financial institutions use credit scores to determine your creditworthiness and your eligibility, most payday providers will also use it to determine how high your interest rate will be. If you have a damaged credit score don’t worry, it is very possible that you will be able to apply for one of these loans. Just with any other type of investment, the higher the risk the higher the reward, for this reason, you might find yourself paying high-interest rates if your credit score is full of dents an scratches.
- Instant Cash: Not many borrowing vehicles will offer you the ability to walk with cash in your hand or in your bank account in such a short period of time. Most payday loan providers will even offer an instant cash model. This is also one of the major reasons why individuals usually find themselves in trouble, and it is that you don’t have the time to truly read what you are being offered. The entire loan is offered to you so easily that you might indulge by not taking the right measurement.
- Capped Interest Rate: Most states have developed their own law for this loan type, the idea of this is to control and oversee the market. In the past, many companies have been charged with Usury and Theft charges because of their actions against their users. This new model of control helps ensure that you won’t find yourself dealing with a loan that has no cap on its interest rate.
*** Tighter Regulation: The criticism and controversy have been so high and lousy that the US government has been forced to jump into regulating this market. This has improved the overall service provided to the users and it has also helped eradicate most companies that were acting in bad faith against their users.
- High-Interest Rates: Due to the low credit scores, most firms will charge unbelievably high-interest rates for these loans. As incredible as it might be, you can find individuals with loans where they are paying high double or even triple-digit interest. If you are having financial difficulties and you actually take one of these loans, you might be shooting yourself on the foot because of all the problems you will be bringing to your life.
- Expensive Fees and Penalties: If you think that paying late your credit card bill is expensive, you have not seen anything yet. Incurring in late payments of payday loans may incur in ridiculous fees and penalties. It is imperative for you to be organized and punctual for your payments, this will help you ride the wave without getting hammered against the sand. If possible you should do your best to avoid being on the spot and having to pay these unnecessary fees and penalties.
- Tight Terms and Conditions: Reading a contract might have never been more important, especially when you know that your counterpart is famous for taking advantage of the necessity of others. I understand that time might be tight right now, but you should at least try to read the macro of the contract in order to properly understand and manage expectations appropriately.
- Sketchy Providers: The worst thing you can hear is your financial institution being called shady or sketchy. There are many red flags that may go off when you are reviewing a provider. Our best advise id for you to focus on well-known names that are regulated in your own state of residence. This will at least ensure that there is a public law that will protect you. Many individuals commit the mistake of getting offshore financing because it can be cheaper, the problems arrive when they have to deal with worse services and less protection than they regularly would.
- Harassment: The world of credit cards is heavily controlled, and you can still hear news and stories of individuals complaining about all the calls and also all the inappropriate individuals calling them. For PayDay loans, it has become known by most individuals that their collection service can be even worse. There is nothing worse than dealing with a firm that does not want you to pay your debt, but it is also treating you with calling your boss or even your family for them to get their money.
Pay Day Loans Top Providers in 2019
1. Earnin | Cheapest Option
If you dive deep and analyze how many Americans are living paycheck to paycheck, you would be surprised. Apps like Earnin are playing a crucial role to help individuals who are employed but are having a hard time.
The idea behind the app is to allow individuals to withdraw money on a daily basis( up to $100), providing access to instant cash based on the hours worked that day. This ain’t really a full payday loan scheme but it is working incredibly well for many individuals. At the end of the day, it will only allow you to cash out what you have worked for, this will not let you go in debt for borrowing more than you can pay.
The model also fixes one of the biggest problems with other payday loans companies, and it is the fees and commissions charged for the loan. Instead of having to deal with expensive interest rates, you are charged a tip that can be anywhere from $1 to $15. This is a steal compared to traditional firms.
It is important to mention that Earnin is an App available on both Android and iOS.
APR: No Interest Rate
Loan Amount: $100 a day | $500 pay period
Length: Monthly if wanted, there is no restriction
2. CashNet USA | Best Onshore Lending
After more than 17 years offering payday loans in more than thirty states in the US, this firm has become one of the most important providers in the country. In a market with so many competitors seen such an old structure confirms how stable and mature the company really is.
From a lending perspective, the firm follows a very simple approach on which applications and approvals could be processed almost automatically. While it might be convenient to use their services, it is important to understand that unlike with Earnin, here you would have to pay full price on interests. Many individuals do not comprehend how high these interest rates can be, and this usually ends in broken expectations and damaged credit scores.
- Variable: 200% to 800% (Based on Credit Score)
- Lines of Credit
- Payday Loans
Loan Amount: $100 to $1000
3. US Bank – SimpleLoan | Best Overall
Due to all the internal bureaucracy and the paperwork necessary to lend money, most traditional financial institutions in the US prefer to stay away from small loans. US Bank is actually one of the only firms in the country that has taken this one step forward with the creation of their “Simple Loan” brand.
The product is intended to be used by individuals who need to borrow up to $1000 and to repay it in less than 6 months. This simple loan follows a similar approach to other payday loans, but with the big difference that you would be dealing with a more stable and trustworthy financial institution. With this firm, you won’t have any type of ugly surprises and repaying your loan will be smooth as silk.
It is important for you to understand that this type of loan is not marketed as a payday loan, but it follows the most basic characteristic. The Bank has tried really hard to offer something that might help individuals to stay away from falling in debt with any of these sketchy firms.
If you ever find yourself needing a payday loan, I would recommend seeing what US Bank is offering before anything else. It is not worthy to get a loan to pay your dues with the intention of being able to sleep better at night, simply to change the reason for your sleepless night.
- Fixed: 71% to 88%
Loan Amount: $100 – $1000
Time of Funding: Same day or next business day
No one has a crystal ball to predict when an unexpected situation might pop. For this reason, it is crucial for individuals to prepare accordingly, this will help mitigate the impact that a situation like this would have on their life.
How would you react if I tell you that almost half of Americans can not afford an unanticipated expense of $400? As incredible as it might be, it is the reality that most individuals in the US have to deal with. The idea behind this whole article is to inform about what are PayDay loans, but the intrinsic value should be to prepare in order not to need these loans in the first place.
It is important for anyone in a bad position right now to understand that the wrong provider can easily make their entire situation even worse. Even though it might look like the only way, if you sit down and properly align your cards, there is a high probability it might be another option. If after this there is still not a viable option, my best advice would be to do what it takes to get rid of the loan as soon as possible and to never get any renewal of it.
Sell yourself the story that by getting out of this loan before maturity, you will be able to earn money in return. This will at least help you motivate yourself and will also make sure you won’t let it slide for a second. Chances are that by doing so you will actually be saving hundreds of dollars and also your peace of mind.
One of the main reasons why so many individuals look at PayDay Loans is the fact that approval can be obtained without a credit check. Instead of needing a credit score in order to prove creditworthiness, these firms use the score to determine how high the APR will be.
Keep in mind that even with other alternatives in the market, payday loans are still one of the fastest and more straightforward options currently available. If you ever find yourself needing cash almost instantaneously, it might be your only option.
If there is a remote chance for you to use or apply for any other borrowing vehicle you should take it. There is nothing bad with getting a payday loan, the problem is the type of companies you will have to deal with. It would be erroneous to blame the entire market for the mistakes of a group of rotten apples, but it is still important to keep it in mind.
There are many different types of PayDay Loans, the most common are:
- Direct lenders: This means that your request will be funded directly by the same firm you are requesting it from. Keep in mind that many companies act as intermediaries between lenders and borrowers, this is one of the reasons why interests rates are so high.
- Credit access Business: A CAB firm will act as the intermediary between you and a financial institution. The difference is that they will take the risk and not the real lender if you default on your loan all your duties will be with the CAB and not the real lender.
- State Regulated: This are great options since they are strictly regulated by the laws of each state, this ensures that caps in interest rates will prevail over anything else.
- Tribal Lenders: This act as affiliates of Native American Tribes, don’t forget that these tribes act as sovereign nations for most cases and that no taxes or payday laws will apply.
- Offshore Lenders: Offshore lenders will act as international lenders so they do not have to respect any local law when it comes to caps or regulation. Keep in mind that this is still the wild west and that risk will be incredibly high.
Community Financial Services Association of America
The CFSA is a governmental agency in the US that looks to protect the public for the financial services that retail individuals receive. If for some reason you would encounter any problem with a provider or simply you want to start a formal complain, you would be able to do so with this agency.
It is worth mentioning that there is a large force lobbying against this type of loans, but also in favor. It is a nasty topic from which many financial institutions would prefer to eliminate while the providers are trying to do as much as possible to sustain their business.
There are many reasons why an individual may actually need to roll over a loan, but in most cases, this term has become famous because of the problems many people have with their providers. It is important to mention that a rollover would allow an individual to pay for a penalty and simply defer the payment of the loan for one more month or simply a long period of time.
The problem with this is that it is not free, instead of many firms utilized this as a tactic to keep individuals inside of their net. Imaging not being able to pay your dues and seen interest compounding against you day after day…. it can become a horror story really fast.
It is important to mention that the real problem comes when these loans renew automatically since the individual will usually don’t have the power to stop it unless fully paying it. Keep in mind that many of these firms usually do not have the right customer service which makes everything even more complicated.
If you see in your contract that automatic renewals may apply, run! It is a trap….!
Until not so long ago PayDay loans used to be the wild west of the borrowing market, no regulations and a lot of different players trying to corner the market. Due to all the complains and cases of fraud of the past couple of decades, the US government has become more involved in the overall sector. This has resulted in a more controlled and stable product.
It is still incredibly important for any individual to take their time analyzing and reviewing all the options before making a decision. There are many different firms offering this type of loan, so there is a broad range to choose from. Even though regulation has made sector cleaner, you can still find horror stories of situations happening right now.
The most common complaint about this type of firm is that they used to take advantage of the necessity of their users, it is no secret that if you find yourself looking for a payday loan it is probably the last resort. Many firms used to add sketchy fine print that will later be used to keep the individuals from repaying their loans, creating eternal loopholes of debt. This can sound farfetched but once you take into consideration the logic behind these types of loans, it is easy to see how easy it is to keep people paying interest longer than they should.
Anything would be a better alternative than taking a payday loan! Having said so, keep in mind that the most important options are:
- P2P Lending
- Payment Plans
- Credit Cards (Imagine using a credit card being a better option…. yikes!)
- Salary Advance
- Family Help