Which is better: Online Payday or In Store Payday Loan?

When an unexpected expense pops up and leaves you in need of cash fast, it can feel like you have to think quickly. You may just need to borrow a couple hundred dollars to get you through until the next time you get paid, but you want it hassle-free and you need help quick!

When you don’t have enough in your savings to foot the bill and you don’t have access to cover it with a credit card, it can start to feel like you have nowhere else to go. You’ve heard about the stigmas associated with getting a payday loan, but you’ve looked into it and it seems like the best option to carry you through. You have a plan for how you will be able to repay it, but before you sign up you want to weigh the pros and cons of getting a cash advance online vs at a branch near you.

COMPLAINTS

Reports from Pew's Payday Lending in America series show that since many online payday loans are not regulated by all states, there has been more cases of fraud, abuse, and harmful practices in internet payday lending compared to traditional cash advances done at a local branch.

Studies found that “9 out of 10 payday loan complaints to the Better Business Bureau were made against online lenders. Most payday loan complaints are aimed at online lenders, but online loans account for only about a third of the payday loan market. Most complaints deal with billing or collection issues. Other reported problems include fraud, harassment, and dissemination of personal information.”

COSTS

You may think that online payday loans would be less expensive than in-store or storefront payday loans considering the differences in over-head expenses. However, research proves that online payday loans typically cost more.

“Online payday loans are more expensive than those offered through stores and are designed to promote renewals and long-term indebtedness, and they frequently result in unauthorized withdrawals, disclosure of personal information, threats against borrowers, and consumer complaints.”

The fee for an online payday loan varies widely by company, but has been seen at $25 per $100 borrowed with an approximate APR of 650%. In Alabama, borrowers are charged a $17.50 fee for every $100 borrowed. So if you borrow $100, you will owe $117.50 on that loan. The fees on in-store payday loans are state regulated.

Learn more: How much does a payday loan cost?

CUSTOMER SERVICE

Most people would think that obtaining a payday loan from an online payday lender and a storefront payday lender would have virtually the same in the way they conduct business, when in fact they are not. In most cases the way these lenders offer support and the customer service experience differs.

Online Payday Loans:

Pros
You have more privacy as you do not have to worry about running into someone you know if you went to the in store lender.
You can conduct business at any hour of the day or night and will not have to stand in lines to wait.
Cons
While online payday loans are processed a lot faster, because of the lack of human interaction you may not be able to speak to someone to answer your questions immediately or help educate you on the terms of the loan agreement.
It is true, you will be asked to supply the online lender with various types of information, such as your bank account, your place of employment, how much you make and your next pay date, but they do not generally ask you to provide this information in writing --- which could trap you into borrowing more than you can handle.

In Store Payday Loans:

Pros
They establish trust with the customers because they can deal with the same person with every transaction.
Customers can ask questions and get immediate answers before making the decision to obtain the loan.
You can experience the respectful, friendly, and fair customer service, and get immediate feedback and recommendations from a dedicated loan specialist who will work to find a way to help you.
Cons
The customer is required to bring in certain information to the local branch such as pay stubs/proof of income, checkbook/bank statements, proof of residence, personal references and other items.
Not the most convenient method, since you usually have to pick up your money in store.

Overall, it comes down to the convenience of not leaving your home to obtain a payday loan with a typically higher costs, minimal to no human interactions, and the reputation of egregious collection practices. Or visiting a storefront lender where you will have human interactions, know who you’re dealing with, and the possibility to develop a relationship with the lender since you typically speak to the same person when handling transactions or collection calls.

As you can see, the good news is if you find yourself stuck in a rut, there are several companies out there that understand how you feel and have made a way to help thousands of people in similar situations get the help they need, when they needed it.

Getting a handle on your money takes time, and Always Money Finance understands. For over 20 years, Always Money has been a regional leader in providing affordable credit solutions to customers across the southeast looking for a convenient and confidential way to meet their needs. If you’re in a jam and need immediate help, any of Always Money’s small cash advance or personal installment loan options may be just what you need to get you going in the right direction.

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