Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Nov 9, 2012

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There are a number of steps prospective borrowers should undertake in order to decide which short-term loan lender is best for them. Payday loans shouldn’t be borrowed back-to-back or obtained very often. It is best to view them as emergency-only financing for desperate situations. However, if a borrower must use one then following these steps would be a wise decision.

Step One

First, prospective borrowers should decide how much money they wish to borrow based upon both their financial situation and their ability to repay a short-term loan. For example, borrowers needing a short-term loan for groceries won’t need to borrow as much money as a person needing a loan for car repairs. It is important for prospective borrowers to remember that any money they borrow must be repaid. Naturally, borrowing less money means less interest, so it is more affordable to only borrow the bare minimum amount of required.

Step Two

Now, prospective borrowers must do their research on different lenders. Since some borrowers are under pressure and time constraints, they may be tempted to simply drive to their nearest retail store lender. Unfortunately, this is not always the wisest decision.

Prospective borrowers will benefit far more by comparing the policies and interest rates of various lenders. Ideally they should solicit quotes from both online and offline lenders to see which offers the best interest rate and policy. For example, some lenders charge more expensive fees for rollovers than others.

Speaking to a representative is also a good idea. Prospective borrowers should make sure the lender they are interested in is accredited with the Better Business Bureau since this is a sign of trustworthiness regulated by the federal government.

Step Three

Once borrowers have selected a lender, they must submit their application along with all the essential information.

The information required by most lenders include:

  • Paystubs
  • Social security numbers
  • Bank statement
  • Contact information

If borrowers are approved they will receive their short-term loan.

At this point, the selection process is over but the borrower still needs to repay their short-term loan. Since these loans carry high interest rates, it is crucial to repay them in a timely manner. These steep fees also lend credence to why it is so important to have selected the lender that offered the best quote. Following these steps though can ensure that borrowers-in-need avoid taking out a loan from a bad lender or scammer that will cost them an arm and a leg.