About Online Payday Installment Loans
Online payday loans work just like payday loans that consumers can obtain in retail payday loan establishments. These are short-term loans designed to help consumers address a money emergency when they are in between paychecks. In an online setting, the customer will submit copies of requested documents such as identification, paycheck stub and a copy of a recent bank statement, either by fax or via e-mail attachment. The customer will receive the proceeds of the loan via direct deposit or wire transfer, usually the next day.
Other People Are Reading
-
Payday Loans
-
Online payday loans allow customers to receive approval and receive the proceeds of the loan in a minimal amount of time. In most cases, the online application is short, consisting of basic customer information, some employment, banking and reference information. After submission of the application, the customer is usually contacted by the lender in order to authenticate identification, and the loan is then processed and the funds are dispersed, usually via ACH into the borrower’s checking account.
Loan Limits
-
The main difference between retail payday loans and online payday loans is the venue. Rarely are online payday loan companies located in the same state as their borrowers. As a matter of fact, many of these lenders are located in states with the fewest laws regulating their existence. This allows the companies to loan higher amounts of money and charge higher fees to their customers than what the local jurisdiction would allow.
-
Convenience
-
The main benefit to utilizing an online payday lender is the convenience of completing the application and approval process without ever having to enter a payday loan establishment. The process is more discreet, and most online payday lenders have the ability to “rollover” a loan at the end of the term by simply deducting the amount of the interest from the borrower’s account at the end of the term and renewing the loan for another term.
Fees
-
In almost every case, borrowing from an online payday lender is more expensive than utilizing a retail payday loan establishment. This is because there are far fewer laws regulating what these companies charge for their services. The average fee for an online payday loan is anywhere from $30-$50 per $100 borrowed.
Direct Debit
-
Another benefit to using an online payday lender is that the customer does not have to “remember” to make a payment to the lender. The interest and principle payments are directly deducted from the borrower’s checking account. This can also be a drawback in that if the payment amount is not available, the borrower can incur overdraft fees or additional fees from the lender for non-sufficient funds.
-
References
- Photo Credit money image by cherie from Fotolia.com
