Payday Loans Online

Some people look down at payday loans online.  They believe that they will either get scammed in one way or another or that they will get tangled up in loan fees, finance charges, and hidden costs.  All of this is not true.  As a past borrower of a payday loan online, I can say from experience that there are no scams, or hidden costs.

Why Does a Person Need a Payday Loan?

There are many reasons why a person may need to get a payday loan online.  Usually, it is used to take care of a bill that is due before you will get your next paycheck.  If some type of emergency or unexpected bills comes up like car repairs or a burst pipe in the basement you may need to get some cash. 

If you go to a bank for the loan, you may not qualify.  Most banks do not do short term loans that usually are only out for a week.  Also, because the loan amounts are not very high and the loan term is short, most people are approved.  With bank loans, you need a high credit score in order to qualify for the loan.

What are the Requirements of a Payday Loan?

The requirements of a payday loan differ greatly from the requirements for a bank loan.  A bank loan requires a very high credit score and sometimes collateral.  With an online payday loan, as l0ng as you make more than $1000 a month, and your income is one lender’s accepted incomes, you can usually get a loan.  The accepted incomes are wages from a job, Social Security, unemployment checks and temporary disability insurance checks.  There are only a few types of income that are not accepted by the payday loan companies. 

These are Social Security in the borrower’s child’s name, Social Security in another person’s name, and state welfare checks.  This is completely different from banks.  The only types of income allowed with a bank are wages from a job.  Another requirement of the payday loan is that you have a bank account that has been active for at least ninety days.  Also, your income must be direct deposited into the your bank account. 

This way, the lender has a better chance of getting their money back.  There is really just a few ways in which a payday loan and a bank loan are alike.  One thing that the two have in common is the age requirement.  Both lenders require that a borrower be at least eighteen years old.  Any person under the age of eighteen cannot enter into a legal contract.

What are the Terms of a Payday Loan Online?

The terms of a payday loan online and a bank loan are very different.  A bank loan is usually a loan that is taken out for months, even years.  A payday loan is taken out for a short period of time.  The borrower has a choice of either a 7 to 14 day loan or a 14 to 21-day loan.  If the borrower does not have the money, the bank will take whatever you put up for collateral. It has serious penalties. 

The payday loan online has penalties also, just not penalties that could take your possessions from you.  If you are late paying a payday loan, you will be granted an extension.  After a week if the money is still not in the bank, you will get another extension.  The borrower is allowed three extensions then the penalties kick in.  If the loan amount is up to $599, the penalty is $50 plus the loan fee. If the loan amount is  $600 or over, the penalty is $100 plus the loan fee. 

How Do I Apply for a Payday Loan Online?

If you are considering applying for a bank loan, it is necessary for you to go down to the bank and apply.  If you want to apply for a payday loan, you can go online and do it.  Rather than having a person sitting across the desk, you will answer questions on the computer screen. 

You will fill out standard information such as your name, address, telephone number, a source of income, and banking information.  On the second page of the application, you will choose the loan amount you want and the length of the loan.  You will not have a banker, acting like a salesperson, telling you why each loan is better than the next. 

When you are finished filling out the loan information, it takes thirty seconds to get the decision. Some banks can take days to give you the information.  After you are approved, you will be required to fax over your most recent bank statement and a voided check.  After that you will have your money.  If you submit your application and fax the information by 7:00pm EST or 4:00pm PST, you will have the money the next day.  If not, it will take two days.  With a bank, it could take days, even weeks.

How Do I Repay the Loan?

Repaying the loan is simple.  All the borrower has to do is make sure that the money is in the bank.  The lender will electronically withdraw the funds.  With a bank loan, the borrower will have to pay the bank each month.

Which is Better, Bank Loans or Payday Loans Online?

Both loans are great for different purposes. If you are interested in short a loan to pay off a bill and you don’t have the best credit, the payday loan is better. If you want a large amount of money with a long time to pay it off and you have good credit, a bank loan is best.