Selecting a Reputable Provider

Although more stringent recent regulation has armed consumers with more protection from unscrupulous lenders, the payday industry still has more than its fair share of predatory, untrustworthy providers. The short-term cash loan business seems to breed this type of fly-by-night lender because typically people in the market for a paycheck advance are financially vulnerable and thus less likely to thoroughly vet prospective lending agents. The quality of your lender will be the biggest determinant of the kind of experience you have as a borrower, though, so taking the time to carefully evaluate providers up front is well worth the trouble. In what follows, we'll discuss the red flags of seedy lenders as well as the hallmarks of established, respected providers.

Solid References

Every lender's site extols the virtues of that company as if it were an industry leader, so it's best to take these sorts of claims with a grain of salt. Third parties of some kind are typically the most reliable source of information on lending companies. If you know someone who recently took out an online cash advance, for example, you might ask what company he/she used and whether it was a good experience. You can also use third-party referral sources like our site. We do not sell payday products ourselves; rather, we evaluate the quality of existing online lending companies and then refer our visitors to them if they meet our criteria. Basically, we save you a step by performing our own assessment of the lender so you don't have to bother.

Online Security

You're probably well aware of the threat of identity theft when conducting any sort of financial transaction online, and your lender should be too. A trustworthy lender should describe in detail the types of electronic security and encryption used to safeguard your information from identity thieves. Once you begin the application process, the site should be secure, meaning the URL will begin with "https," and your lender should also explicitly state how your information will be used. For example, if your lender plans on sharing your information with third parties, you should be aware of this.

Red Flags

It's usually fairly easy to spot disreputable lenders by watching for a few common red flags. First, beware of companies that make outlandish, too-good-to-be-true promises. For instance, you might encounter sites that promise "fast" cash or "no paperwork required." These kinds of claims are rarely true and are probably a strong indication that you can't trust the company making them. Second, look carefully to see how long the company has been around. Typically, the site will have some indication of when it was created, and that will give you an idea of how experienced the company is. The longer the provider has been around, the better. That way, you can avoid dealing with fly-by-night companies that haven't been around long enough to really prove themselves as reputable organizations.

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