subject: Is it Safe to Apply for a Payday Loan Online? [print this page] Is it Safe to Apply for a Payday Loan Online?
Like many industries, most financial dealings are now done online. Whether you're looking for insurance or trying to secure a loan, the Internet is a good place to find businesses and even make applications. In fact most payday loans are now exclusively available online, allowing consumers to apply and secure finance within minutes - but does that make it safe?
As with most situations, the safety of applying for a loan online is down to your own precautions. For instance, if you choose an unregulated lender then you will putting yourself at much greater risk. A reputable company will always bear the proper accreditations on their website, giving a clear and instant indication as to whether they should be considered trustworthy.
You should also look to see if the site is secured, particularly when it comes to the actual application process. This isn't a strict necessity, a firewall on your site should warn you if there are any issues and prevent details being taken illegally, however it is one more way of ensuring that your information won't get into the wrong hands.
Security is a big worry for many people, and not without some justification. Each year there are thousands of recorded cases where people have credit card details, money and even identities stolen. This creates something of a trust issue. But offline transactions are often no less susceptible.
When it comes to getting a loan, as with any financial agreement, you want to make sure that you're getting the best deal possible and borrowing from somebody you can trust. If you visit an established bank, there is clearly a feeling of security that comes with that. Online-only companies, who don't have a physical high street presence, require a leap of faith. However, that shouldn't make them any less trustworthy.
The Internet is a great resource for research too. So you can easily find out exactly who you're dealing with and whether people have enjoyed a good or bad experience with them in the past. If there are some obvious issues that stand out, maybe you should look elsewhere. However, if they come highly recommended, you might consider using them.
When you're desperate for finance and have perhaps already been rejected elsewhere, this can lead to being a little less thorough with who you choose to deal with. So just take a short while to compose yourself and get back to the task at hand. If you end up taking a wrong turn it could cost you far more.
As you're probably already well aware, payday loans aren't the cheapest form of finance available. They aren't as bad as the interest rates might suggest - often around 2000% APR - but there is a definite cost attached. However, this should be limited to around 25% of your overall loan. So for instance, if you're looking to borrow 240 pounds the total repayment should be 300 pounds.
If you find that the loan provider has an upfront charge for a loan - even before your application has been accepted - then you should steer clear. There are companies that prey on the desperation of some to get them to pay for a service that simply puts them in contact with other lenders. This should be avoided at all costs.
In fact the only extra charge that you might incur would be an administration fee for a quick transferral of funds to your account. But this should be detailed in your quote before accepting the payday loan offer. So if you think anything looks suspicious or you're not sure whether you're being taken for a ride, question it first and don't regret it later.
So as long as you are sensible and put in a little effort to find a reputable payday company you should be in good hands. Check for their credentials and always ensure that they are a registered lender. If they are, then you will have a body to complain to should anything go wrong with your loan or the process. If anything at all seems untoward, steer clear.
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