Lenders

Virtually anyone with short-term money needs can find a payday loan lender down the street, across town, or on websites around the nation. The sheer number of companies willing to give out money is great news for borrowers, but it can also cause quite a bit of confusion. How does a person know which lenders are reputable, which lenders have the lowest fees, or which lenders have the best repayment terms? The following guide provides answers to these questions and many more.

Direct Lenders Payday Loans
One source of confusion surrounds the difference between direct lenders for payday loans and their affiliated matching companies.

Some websites offer payday loan matching, which means that they take basic application details, offer customers a choice of several lending institutions, and then pass the customer along to those institutions for the final contract approval, bank deposit, and repayment. These companies are not direct lenders of payday loans; instead, they refer customers to a third-party bank or lending company for financing. The sites receive a commission for each loan contract that is generated, which means that unscrupulous sites may direct borrowers to lenders that are not a good match for their needs. Reputable payday loan matching sites offer a genuine service to people shopping for the best deal, but because they are not direct lenders cash advance fees may be higher.

In contrast, direct cash advance loan lenders not only take the application details but also fund the loan. They are similar to banks that process loan requests, take payments, and service customer questions all in a one-stop shop. These companies can often offer lower fees and better repayment terms because they are not paying extra money to middlemen. In many cases, direct lender payday loans are also simpler because the borrower deals with the same company, and frequently the same loan specialist, from start to finish.

New Lenders Versus Established Companies
The low cost of Internet-based technology has allowed new payday loan lenders to spring up all over the globe. The increased competition tends to keep loan rates low, but it also makes choosing the best payday loan lenders difficult. Many borrowers ask whether they should trust new lenders or stick with established companies.

New cash advance companies often have streamlined operations so they can compete in the marketplace. Customers may see faster processing times, more convenient hours (many companies can lend money 24/7), and more friendly customer service. At the same time, small payday loan lenders may be limited in the number of loans they can fund or how much they can give to each borrower.

On the other hand, established cash advance loan lenders frequently have a business plan that keeps them financially viable from month to month. They know how much cash they can lend, when it will be repaid, how many people will fail to pay back their debts, and what they will need to spend in order to make up the extra money. Older and well-respected payday loan lenders only need to ask their large customer base for referrals in order to increase sales. Consequently, they may be able to spend less on advertising and focus more funds into individual short-term loans. Not all established companies can be considered easy payday loan lenders, however; some firms are slow, demanding, and rarely focused on more than their return on investment.

Chains Versus Stand-Alone Operations
The same type of thinking can apply to the choice between chain-based direct lenders for cash advance money and stand-alone, independent operations. Some chains use the power of multiple locations, offline and online, to reach more customers, open up more opportunities, and service more loan needs. Others use their strength to gobble up competing businesses and minimize borrower options within the marketplace. The argument is similar to the debate for and against big box stores versus small businesses.

The decision whether to go with established direct payday loan lenders only or new payday loan start-ups, chains or independent companies, is a personal choice. The advice below can help narrow the list of finalists.

Best Cash Advance Lenders
The top cash advance lenders with the highest consumer ratings tend to have several traits in common. These characteristics include:
- Focus on customers. Indirect and direct payday loans lenders understand borrower needs and design loan programs to help them meet their financial obligations. They are aware of local news events that may create hardships for the community. They are also familiar with the standard reasons for wanting direct lender cash advance loans, such as hospital bills, dialysis treatments, cancer therapies, automotive repairs, utility shut-offs, collection notices, and tuition payments.
- Responsibility. Successful cash advance lenders only loan money to people who they reasonably believe can afford to repay the debt. If they have a choice between putting someone into greater harm or coming up short on their loan contract quotas, they are willing to forgo the sale.
- Focus on education. While all loan representatives should be trained on the latest industry trends, the best payday loans direct lenders only see the sales process as a chance to educate borrowers on their financial options. They are not afraid to discuss how bank loans or credit card cash advances can be better alternatives for long-term financing. They are also comfortable with explaining why one loan product may be a better option than another.
- Promote comparisons. At the same time, the best cash loan companies encourage customers to shop around. They know they offer affordable terms, and they understand that potential borrowers are more likely to return after they understand their other options within the marketplace.
- Directness. The top payday loan lenders do not hide behind legal jargon. They are proud of their loan programs, are willing to answer questions to inform customers, and are upfront about the advantages and disadvantages of borrowing their their company. The best indirect payday loan lenders only operate on an advisory basis, and they disclose the fact that they do not actually lend money.
- Legitimacy. All of the best loan companies are reputable firms that operate in a scam-free manner, as addressed by the information below.

Real Payday Loan Lenders
No matter which payday loans lender ranks at the top of a borrower’s list, the following tips can help prevent scams and Internet frauds. Anyone considering a cash loan should look for the following characteristics of reputable direct cash advance lenders:
- No upfront fees. Legit payday loan lenders do not charge application fees, processing fees, insurance expenses, or any other costs until after a customer’s application has been reviewed and a contract is ready to be signed. Fees may be taken out of the initial loan funds or added to the repayment schedule, but reputable lenders do not charge them in advance.
- No payments to individuals. Legitimate cash advance direct lenders only ask for payments to be made out to the corporation. They never cash checks in the name of an individual agent.
- Full disclosure. Real cash advance lenders help customers make informed decisions about their finances; they do not try to hide the details of a potentially unaffordable loan contract. Before accepting a short-term loan, customers should be able to see the amount being loaned, the cost of individual fees, any interest that accrues, the total amount of payments, and when the payments are due. Borrowers should also be aware of the consequences if a payday loan direct lender is not paid in full by the agreed-upon date.
- All details in writing. True cash advance lenders direct their customers to written applications, contracts, and disclosures. They do not take personal information over the telephone.
- Licensed to operate. An important characteristic of actual payday loan lenders is that they must be licensed in each state where they do business. The licensing requirement typically applies to the state where the loan customer lives, so a company in California cannot do business in Utah until they have obtained the proper credentials for doing so. People who are concerned about the status of cash advance lenders online should check with their state’s Attorney General office.
- Compliance with state laws. When taking payday loans from direct lenders, customers must make sure that they are following all state and local regulations. For example, one state may permit loans up to $1,000 while another state sets the limit at $300. One state may postpone payments until 60 days after the loan is issued, whereas another state may determine that loans must be paid back in full within 14 days of issuance. Failing to comply with state laws can be huge problem for a cash advance loans direct lender and for each customer involved in the situation.

Making the Final Decision
Each year payday loan lenders direct millions of dollars to cash-strapped individuals who need the extra money for a short time. When cash loans come from legitimate payday cash advance lenders, they can bridge the gap between paychecks without causing the borrower any additional financial harm. In choosing the right lender, customers must be able to 1) differentiate payday loans with direct lenders from loans solicited through matching companies, 2) decide whether loan chains, independent agencies, start-ups, or established businesses will be part of the selection process, 3) consider what traits distinguish the best lenders from the rest of the industry, and 4) confirm that a cash advance business operates in a legitimate, law-abiding manner.

After thinking about these details, most people discover who their best lending company is. In the mean time, they have also learned enough about their reputation and operations to feel more confident during the temporary loan process. Choosing the best lender for cash loans takes a bit of time, but the end result is financial control and the freedom to do whatever is necessary with the loan money.