How to Protect yourself from a Payday Loan Scam

So, you need cash in a hurry? For many, this means one thing: a payday loan.

Before you make this decision, there are a couple things you need to do. First and foremost, consider your alternative options. You may find there is a better, more affordable way to get your hands on the money you need.

Secondly, you should become familiar with the many payday loan scams that are out there. If you aren’t careful, what may not be the best idea in the first place could soon turn worse. For example, you could open yourself up to identity theft.

Here are three things you can do to protect yourself from a payday loan scam:

1. Check to see if the lender has a license. If a payday loan service doesn’t have a license, run the other way. Companies without a license don’t have to comply with state laws, meaning they can do pretty much whatever they want.
2. Search for hidden fees. It goes without saying that a payday loan can be very expensive. But guess what? You may end up spending even more money if you aren’t aware of hidden fees.
3. Don’t put out money upfront. Scammers often times ask for money upfront, such as to cover processing fees. This is one of the top signs of a scam. If somebody asks for money before they can lend you money, they are up to no good.

These are just three of the many things you can do to protect yourself from a payday loan scam. Of course, you have another option: avoid this type of loan altogether. Not only will this help you avoid a scam, but it will likely improve your financial situation. There are other ways to get the money you need.