Online Payday Loans: Things You Need to Know
It’s difficult to know what life throws at you. But adults have probably experienced dealing with unexpected or emergency expenses once in their lives, and the same will probably agree that sometimes it’s hard to deal with such expenses, especially if they come in times of a financial struggle.
Take, for example, when your car suddenly wouldn’t start and you need to go to the car shop to fix it. The shop tells you to pay a few hundred bucks for the car repair and, unfortunately, you’re short in your budget. In such a case, the best option is to get a fast loan.
Online payday loans allow you to borrow money fast and with less stringent credit checks. Here are things you need to know about online payday loans.
Online Payday Loans: What is it?
Online payday loans are under the category of short-term loans. Online lenders most commonly offer such loans for borrowers who need to borrow money for the short-term and those borrowers who have bad credit scores. A payday loan, as you can guess by its name, is to be repaid on the payday of the debtor.
Interest rates of online payday loans vary, but they can be more expensive than other loans. For every $100 a person borrows, a $15 to $20 fee is charged to the loan. Translated into annual percentage rate, that’s around 400% to 500% APR.
Online lending firms like Siloans.com typically assess your income and credit score to determine the APR to be charged on your loan. One of the requirements before the loan you need is released is to give an account withdrawal authorization or a post-dated check to the lender.
Benefits of Online Payday Loans
While the APRs of online payday loans are quite high, people still opt to take out this type of loan because of its many advantages.
- No Hassle to Apply. Applying for a payday loan is very easy because the application is online. It means you don’t need to visit the lender’s office to borrow money. The online lender will process your loan application online through its website. On the website, you have to answer the online application form and submit it to the lender.
- No Strict Credit Checks. Another thing that people like about online payday loans is that the credit checks are not strict. Even borrowers with bad credit can avail of the loan as long as they have regular monthly income proving that they’re able to pay the loan amount and interest.
- Easy-to-Pay Loan Amounts. Online companies that lend payday loans have a set limit on the amount that you can borrow. It’s to ensure that you can pay the loan in full at its maturity date. Most lenders offer $100 up to $1,000 for online payday loans.
- Quick Transfer of Funds. For those who badly need to borrow some cash, online payday loans are a great option. Since the application process won’t take eons to finish, the lender can immediately assess your application. Once you receive approval for the loan, you can get the funds that you need at once.
- Security and Privacy. Understandably, some people have doubts about the security and data privacy of applying for a loan online. But many online lenders now adopt robust data protocols and computer systems to ensure that your sensitive information is secure. Read reviews about the online lender before applying for an online payday loan.
Online Payday Loan Application Process
If you’re wondering about the application process for online payday loans, read these steps to guide you.
Filling Up the Online Application Form
Find a reputable online lending company on the internet. When you find one, look for an online application form on its website and fill it up with the necessary information, such as your name, place of residence, phone number, employment status, monthly income information, etc. After you’re done, submit the form to the lender for assessment.
Review of Your Application
After receiving your application, the lender is now going to review the information you provided in your application for validity. The review can be done manually or through a computer.
Assessment of Your Capacity to Pay Back the Loan
The lender will now check your capacity to pay back the loan amount plus its interest through the income you’ve provided in your application. Those with stable income are more likely to receive loan approval.
After the lender sees that the personal information in your application is valid and that you have the means to pay back the loan, he/she will now approve your application. You’ll now receive a copy of the terms and conditions of the loan. Peruse it carefully before signing.
When you and the lender come to an agreement, you’ll now get the loan amount you need. It will be deposited into your bank account immediately or in the next few days.
Do you want to borrow some cash? If yes, consider online payday loans. It’s no hassle to apply for this loan option and you can get the money you need in no time. But be aware of the high-interest rates of online payday loans.