Online Payday Loans

Finance has changed a great deal in the last four years. Just under half a decade ago, when in need of short-term financing or a temporary loan, the vast majority of consumers and professionals alike would turn to their account overdraft or local bank, taking out a small loan at an even more modest interest rate, allowing them to finance their own spending without a great financial risk to anyone.

However, in changing worlds, these activities disappear. Through extortionate overdraft fees – now sometimes as much as $28 per infringing transaction – and a great deal of side effects to the average personal loan, fewer people are borrowing small amounts of money than ever before. It's not due to the recession – in most cases, these increase lending – but the ways in which banks treat customers.

From high fees to worthless financing terms, long-term loans for small sums all the way to the maze or documentation and qualifications that need to be worked through, taking out a small loan through your local bank isn't the simple task it once way. For this reason, amongst others, many people with a need for financial assistance are looking outside the banking system, and even sometimes online.

This means smaller, more local, and more consumer-friendly lenders – the small loan shops we've seen pop up throughout the country during the recent recession. Although the economy is shooting back to its former health, helped somewhat by consumer spending from these loans, it's no longer the powerhouse it once was. For this reason, many people still need to borrow money frequently.

This isn't done through a bank or major lender, it's done through a small company – often a payday loan lender. These lenders specialize in small loans – typically under $1,000 each – and make them for short periods of time. In many cases, a borrower may only take out a loan with one-month for it to be repaid, allowing them the shortest possible period of exposure to account-related interest.

Just like other industries, this lending business is moving online. Today, rather than walking into a physical outlet or lending office, you need only navigate your browser to the right location to find payday loans and other cash advances online. It's the way of the future, with many online payday lenders dishing out thousands of loans daily, to borrowers located in all reaches of the country.

Unfortunately, like any other online industry, this one has found a few dents in its armor when it moved online. From online payday loan scams to issues for lenders and consumers alike, there's more than a few issues to watch out for when taking out an online payday loan. We've catalogued many of the scams, spam, and issues below to help you avoid them when taking out an online loan.

Did you know that the vast majority of payday loan customers originate from search engine results pages and advertising? Those advertisements in your browser's sidebar – the ones offering deals on loans and personal financing – are placed by lenders to grab your attention. They attract thousands and thousands of customers each day, making business good for the lender and borrower alike.

Unfortunately, not all of these advertisements are placed by the ethical lenders. Many are gamed into the system by lenders that are borrower-unfriendly, with poor deals and predatory loans. In a range of cases, these ads are often placed all by the same company, making it seem as if there is a greater amount of variety amongst lenders than there really is. Surprisingly tricky tactics indeed.

Thankfully, however, you can avoid these merchants. After you've viewed a lender's offerings, do a quick Google search for their name. By doing so, you'll uncover stories and experiences of some of their past clients. Are they positive? Do they reflect the borrowing experience well? Use these types of stories to form your opinion on any lender before you even consider working with them.

Then there's another irritating scam, one that's the ire of both lenders and payday lenders alike. A contact form, designed to look just like a loan application, is actually nothing of the sort. It's just a lead generation form, designed to pass your information on to payday loan commission brokers, in an effort to drum up business and earn a greater amount of commission for the people behind it.

This one can also be avoided, again, by doing a quick Google search for the company's name. Most payday loan companies understand that their reputation is everything, and that in order to sustain an influx of repeat business, they need to please their customers. As such, they'll have few reviews that are critical of them, easily separating these good merchants from the unethical scammer types.

While the scams and spam can seem plentiful, there are good payday lenders on the internet. Often, it's just a matter of searching. They may not be the most visible of the payday lenders, but they are out there.

Whether to cover short-term expenses, repay a friend or relative, or simply to improve cash flow, an online payday loan is a great financial tool. However, with the anonymity of the internet backing up a sea of nasty lenders, it's also one that requires a reasonable degree of research. Borrow away, but make sure it's only from reliable, easily researched, and long-serving online payday loan lenders.