Being a former employee in the payday loan business, I have found that there are a few little known ways to get better terms on your payday loan. First off, the interest rate most payday lenders charge is astronomical. This can be seen in what is usually a triple-digit APR on your loan paperwork.
Now while it is apparent that many of you need money fast (which is why many payday loan lenders prey upon this, setting unfair loan terms), there are a few things you can do to reduce the high interest rates that payday lenders charge.
1. Extend the due date
Most payday loan lenders will make the loan due on your next payday. Since people tend to have the most trouble with money shortage in between paychecks, this can mean that your payday is coming very soon, perhaps within the week. By simply asking the agent servicing your loan to extend the due date to the next pay period will give you more time to use and pay back the loan. Since many lenders charge a certain fee per $100 borrowed, extending the due date will reduce the APR on the loan.
2. Ask for a Discount
Especially nowadays, lenders are going to extremes to attract new customers. Many payday lenders have unadvertised bonuses and discounts for new customers. If you are applying for a payday loan, and you are a new customer, ask what new customer bonuses or discounts they offer. In many cases, this is usually something like $25 off of your loan, making the loan terms a bit better. When you are a new customer trying to do business with a Payday Loan company, always ask what they have to offer for new customers.
3. Borrow Less
While this won't necessarily lower your interest rate, it does mean you will be paying less interest. Many borrow $100 or $200 more than they actually need so they have an extra cushion before payday. While having a cushion is nice, it's just not worth it when it comes bearing interest. Budget out how much money you will actually need to scrape by until payday. Any excess you have leftover on payday is a waste (because it is money you are paying a high interest on). So basically, don't take out more than you need.
I think we can all agree that payday loans do have unfair loan terms, but they do offer a quick and easy way to get money when it is urgently needed. Follow the tips above to keep your Payday Loan Interest low.