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How online loans work
If you are looking for a quick cash boost via a short-term loan which can get you through till your next paycheck, then an online payday loan is what you can look at. An online payday loan can plug the gap created in your finances by small emergencies in your life. The usual amount of instant cash loans is between $50 and $500. You can get one of these loans from a payday loan online lender, a company that also has a range of other financial services such as foreign currency exchange, utility bills paying and license processing.
What is the exact process like?
Online payday loans follow a quite simple process. The most common steps to get a payday loan are as follows:
- Visit a loans online lender’s website. A lot of these lenders have an online-only presence. Some companies may have a physical retail outlet as well, but that depends on the company. In many cases, borrowers simply call or visit the website of an online loan provider..
- Next, you will have to find an “apply now” or an “application” section and fill out a form. This form normally asks for personal details like name, contact information, employment details/history, and basic bank details. Some lender may even ask for reference contacts. These could be family members or friends. The bank may contact these references in the event of non-repayment of loan by you.
- • Once the online application is approved, you will be eligible to get the loan. However, before the loan money is sent to you, the lender will ask you to submit a post-dated check with the loan repayment amount along with the fee of the lender. Lenders normally quote their fees as a dollar amount per $100 of loan amount borrowed. $15 of fees per $100 of loan borrowed is a common level of fees charged by lenders.
- Once the above steps are completed, the loan amount is either deposited electronically to your bank account or you may be given a check by the lender.
- Normally, the term of such loans is 15 days or two weeks. During this time, the post-dated check that you gave the lender during your application is held with the lender.
- After the loan term period concludes, the lender cashes the post-dated check which they had been holding. The money gets deducted from your bank account.
- If for some reason you are unable to repay the full loan amount, then lenders may offer the option of rolling over a partial outstanding amount for a further two week term. Fees will be charged for this “second” loan.
How long does it take?
An efficient, simply, and convenient application process makes quick loans online quite attractive. Another reason for the attractiveness of payday loan lenders is their flexibility in terms of evaluating the application and working hours. Online payday loan lenders work with borrowers who have bad credit scores. Online lenders can be accessed from any location, and they tend to work longer hours than almost all the conventional banks. In fact, some online lenders operate 24 hours for all 7 days of the week. Can you ever imagine a bank working on a Sunday?