Payday loans are small and unsecured loans. It is regardless of whether repayment of loans is linked to a borrower’s payday. The interest rates of the payday loans are usually high. They last for a short period of time. These loans are also called payday advance, salary loan, payroll loan, small dollar loan, short term or cash advance loan. Different countries have different legislation regarding payday loans. The payday loans industry is an unregulated one in the United States.
Payday loans basically involve lender providing short term unsecured loan which is to be repaid at the borrower’s next payday. Some lenders verify the borrower’s employment and income. Money can be borrowed by going to a payday loan office or by applying for payday loans online.
Following are the steps to get payday loans online!
A. Finding A Company And Gathering Materials
1. Find an online company which is legitimate that offers a short term loans or payday loans. Visit the company’s website and see their policies. Look at their interest rates and any sort of fee charged by them if you do not pay back the loan on time. See if the full application is listed on the website. If you cannot access the full application, consider applying for the payday loans elsewhere, as this could lead to covering up of hidden fees on the hidden pages of the application.
2. Use sites that have reviews or ratings about the company. Obtain the reviews of the company if does not have reviews anywhere. Refer to local agencies like State Consumer Affairs or other government bodies if a review cannot be found.
3. Know your limit because getting the right loan amount and setting up a plan for paying back is important and it is crucial to make sure that the loan will work for you. Most companies offer bigger loans but that does not mean that you should take much as you will be charged incredibly high fees if you do not pay it on time. Take the loan of exact amount you need and immediately draft up a budget that will allow you to pay back that amount.
4. Gather necessary supplied beforehand. When you are filling out the application form, it will be helpful to have everything you need right next to you. Every company has different requirement of information. Both personal and financial information is asked by the companies. These include-
a. Your bank account information
b. Your contact information
c. Proof that you are old enough to get a payday loan, that is, you are eighteen years old
d. Your employment proof
e. You employer’s contact information
B. Applying For Your Online Payday Loans
1. After having compared several companies, choose the one that you think is the most reliable and pull up the application on their website. It is important that the full application form is visible to you so that you can look for hidden fees.
2. Restrictions for payday loans are different for different states. Make sure you select your state and receive the correct rates and policies. Some states put a cap on the amount that can be borrowed while other states do not let you renew payday loans when your payment date comes up.
3. Double check the fees that will be charged. Make sure that the fee remains the same from the starting of filling the form till the end. Take a look at their interest rates too. The Truth in Lending Act requires these companies to be completely transparent about their fees and interest rates.
4. Fill out the application form with all the necessary information asked for. Different companies require different information. Some of the common information asked are-
a. Date of birth
b. Contact information
c. Bank account information
d. Current job profile and salary
5. Once the application form is completed, payday loan companies will have to approve it. Most online loan companies will contact you via email. Wait for the application to be approved and check your email. It takes three business days to send out approval mail.
6. Once you have been approved, the company will transfer you the money in your bank account within a business day of your approval.
C. Paying Back Your Loan
1. Make sure to pay your loan back on the following payday. Lending office will withdraw money from your bank account on the scheduled payment day. The money will be withdrawn if you have the correct amount of money in your account. On the other hand, if you do not have enough money in your account then the company will charge you a fee for not having the money on time. Some companies may collect interest till the day you pay back your debt in full.
2. If you realize that you won’t be able to pay off your loan on the scheduled payment day, then consider renewing your loan. You will still be charged a fee for this but you will not be charged the incredibly high late fee for not paying off your loan on time.
The Bottom Line
It is important to note that the interest rates on the payday loans are exceptionally high. When compared to the student loans, or even the personal loans for that matter, the interest rates on the payday loans is more than 1000% as compared to the former loans. Therefore, one must tread with caution when availing the payday loans.
In addition to this, one must research properly before availing the payday loans. Also, one must read the terms and conditions properly as there can be a number of hidden charges. Another important thing to note is whether you would be able to pay back the full amount within the due date or not. If your answer is not a definite one, you should not be availing the payday loans as this might put you in the vicious cycle of debt that most people remain in after availing the payday loans.