How to Distinguish Online Payday Loan Scams from the Real Thing

Online payday loans can provide you with money quickly. However, there are some unscrupulous companies out there that are designed to take advantage of you. Here are a few ways that you can distinguish online payday loan scams from the real thing.

Upfront Fees

There are a number of online payday loan companies out there, and they have varying degrees of professionalism to their websites. You cannot always tell whether a company is a scam just by the quality of its website. Instead, check out the fee schedule on the website if it is available. If a lender requires any kind of fee upfront, you should immediately become skeptical. Most legitimate online payday loans do not require you to pay anything upfront. They understand that if you had money, you would not be in the market for a payday loan. Therefore, they lump the finance charges and any fees into the loan. Then at the end of the loan term, you can pay for it all. This is a standard practice with online payday loans, and you should not ignore it for any company.

Better Business Bureau

One of the best ways to tell a scam from a legitimate payday loan company is to check out the Better Business Bureau. The Better Business Bureau keeps track of nearly every company's record when it comes to customer service. If a company is a scam, it is likely that there will be several complaints against them with the Better Business Bureau. The Better Business Bureau completes a cumulative report of a company's record over the last several years. You can see how many complaints were filed and what the nature of the complaint was. You can even see if the company resolved the complaints. The Better Business Bureau will also offer a cumulative score with a letter grade. This should help you determine which companies are legitimate and which ones are scams.

Online Reviews

Another source that you could utilize are online reviews. There are a number of online review sites out there that allow customers to post their thoughts on a particular company and rate their level of service. Because people's finances are involved--and potentially at risk--when they deal with online payday lenders, these companies will typically evoke quite a bit of emotion from their consumers.

You should be able to find some detailed reviews of the company on a number of different sites. They will often give you very specific information about the lender and the customers' experiences with them. Many of these sites will even provide you with a cumulative score based upon all of the users' ratings. This can help you greatly because you can compare the ratings for several online payday lenders.

When dealing with online reviews, you of course want information that is as unbiased as possible. If a website of reviews appears to be affiliated with any company being reviewed, you should take what it says with a grain of salt.

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