How Online Payday Loans Work
Kamis, 31 Januari 2008
All online payday loans lenders require the consumer to type out an online application providing personal information, employment information, current banking and financial information, and references.
All online payday loans require applicants to meet minimum criteria in order to successfully complete the application.
These minimum requirement usually consist of:
- Being Employed for at least 3 consecutive months.
- Earning at least $1,000 per month in income.
- Having a valid checking account open for at least 3 months.
Specific lenders also mandate current bank statements and paycheck stubs. Online payday loans lenders also consider the frequency of NSF’s (non sufficient fund) charges an applicant has incurred in the past 30 days, and the number of current outstanding online payday loans.
An advantage of online cash advance loans payday loans to most consumers is that they are offered to people with no credit, poor credit or bankruptcies AND they can be done anonymously to the public and in the comfort of one’s home. Unlike traditional lenders, online payday loans lenders do not require credit bureau reports from Experian, TRW, or Equifax. Instead, most online payday loans lenders use consumer information services provided by Tele-Track. These services do not check your credit history. Tele-Track simply verifies the applicant’s personal, employment, banking and lending information. For this reason, it is extremely important to answer application questions truthfully and accurately or the application may be declined.
Once completed, the application is sent to the online cash advancepayday loans lender for review and approval or denial. If the applicant is approved, he or she will be notified (typically via email) that they are approved. The payday lender calculates the amount of the payday loan to be lent, usually between $100 and $1500. The amount of the approved payday loan is dependent on several criteria, including all of the factors listed above.
The approved applicant is required to print and sign a signed copy of the online payday loans lender’s contract with the loan amount, loan fee and terms specified. Lenders have other requirements and mandate that paycheck stubs, bank statements, and a personal check also be faxed to the lender.
Once the fax is received by the lender, the lender will verify the information is correct and process the loan. Most online payday loans lenders will electronically deposit the loan amount in the applicant’s checking account overnight. Online payday loans are usually not processed over the weekend.
On the specified pay date of the term, the online payday loans lender will electronically withdraw the loan amount plus specified fees. For example, if the payday loan was for $400, and the loan fees were $20 for each $100 borrowed, then the amount electronically withdrawn would be $460 at the next term.
Most online cash advance payday loans lenders offer clients the option of “rolling over” a loan, meaning that the loan can be extended to the next payday. The client can contact a lender and request to extend the repayment date to the next payday. In most cases the fees double, meaning a $400 payday loan “rolled over” would incur a total fee of $80, requiring a repayment of $520. Payday loan recipients should try to pay their loans off as quickly as possible to keep fees to a minimum.
