The very nature of payday loans is predatory, as it is considered by many countries around the world, and some states in USA. And they have forbidden such practices in their jurisdictions. But even though they are predatory, honest payday lenders will respect the deal you two made, and they will list all terms and conditions of the loan. There might be some hidden catches, but if you research a bit before taking that loan you will find them on time.
Real problem in the world of online payday loans are fraud sites that have no intention of making fair contracts with you, all they care about is money, and they will scam you for it. In fact, there is only a small number of fully respectable online payday lending sites, due to the fact that many of others will try to sneak few clauses in the loan to make you pay more. But fraud sites are even worse than them, and you can distinguish them from legitimate sites if you:
1. Avoid all loans that require no faxing of any documents.
People fall for this kind of thing because they see the benefit of having no trace of the loan that can be linked to them. This protects you from other debt collectors who would like to get their hands on the money you got from the loan. But this also means that there is no document that states how high is your interest rate and other important components of the loan. And that gives freedom to the lender to alter those things whenever they want.
2. Are not subjected to credit check.
Many people jump on the loans in which a lender doesn’t perform credit check or background check on you because they are afraid of being rejected for those loans due to outstanding debts they have. Many payday loan sites will avoid doing background check because they are aware of the fact that they are last place the borrower has. But those lenders will do a basic background check to see whether you have source of income from which you can pay back their loan. If they say that none of that is needed then there is something shady in their business.
3. Can’t locate any information about lender contacts.
There are three steps in checking contact details of the lender if they have contact us option in which a number and physical address are found. If there isn’t that option then avoid them. If that info is found there go and call the number that is shown and confirm whether it is their number or not. Many fraud sites will put some random address there, but you can check the validity of that data through yellow pages. If you can’t confirm the validity of one of those two things then the lender should not be trusted. Last, but not the least go on WhoIS and find out who really owns the URL of the online payday loans site you are investigating.