A payday loan can help you in the midst of a financial crisis or if you need to spend some extra money that you haven’t accounted for in your monthly budget. If you don’t get paid for another couple of weeks, but you need the money right away, a payday loan can be a great solution.

With a payday loan, you get the funds you need, then pay off the loan once you receive your next paycheck. Payday loans are generally quick and easy to apply and be approved for, but it’s critical that you work with a reliable payday lender to ensure you don’t end up paying unnecessary fees or running into privacy complications.

With that in mind, here are five red flags that tell you you’re working with the wrong payday lender: 

#1 They Are an Indirect Lender

An indirect lender acts as a third-party between you and an institution that actually provides the funding for a payday loan. This is a problem because it adds more risks to the application process by sharing your private information with several different lenders until you are approved. 

What’s more, indirect lenders require additional fees since they work as a middleman between you and the direct lender. These unnecessary fees can be avoided by simply working with a direct lender in the first place.

#2 They Ask to Run a Credit Check

Normally, running a credit check for a loan is seen as standard practice. However, payday loans don’t require credit checks. These loans are meant to be short-term and lower loan amounts, so there’s simply no need for a check to be run. 

It should seem suspicious if a payday lender makes you undergo a credit check as part of your application. Also, it can cause damage to your credit score, a negative side effect that can be avoided by working with a lender who doesn’t require credit checks.

#3 They Don’t Have an Online Option

Because the loan process is simple and quick and doesn’t require the same approval processes as traditional loans, payday lenders should offer an online option. Going to a lender’s offices and dealing with a face-to-face application can be a hassle, and the convenience of an online application process means you can get the funds you need quicker/

#4 They Require Several Financial Documents

You shouldn’t need more than a few documents, such as an ID, proof of employment or regular payment, and a few other documents when applying for a payday loan. 

So if your payday lender asks for several other financial documents, this can be a red flag that they’re not a reliable lender. Not only does asking for additional documents unnecessarily drag out the approval and funding process, it can also be an infringement on your privacy. 

#5 They Don’t Have an Immediate Funding Option

Several lenders make you wait days before funding shows up in your bank account. This is a fundamental problem as it negates the benefits of a payday loan, which is meant to be virtually immediate. Always look for a direct payday lender that offers direct funding options. As a result, you will get the money you need within minutes of being approved. 

If you’re looking for a payday loan, then you can be overwhelmed by the sheer number of lenders on the market. Keeping a lookout for these red flags can help you be sure you’re working with a credible lender to get the payday loan funds you need.

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