A payday loan is a short-term, unsecured loan that you receive from a business (typically a loan store), rather than a bank. It is called a payday loan because the money is generally meant to help you make it to your next payday. It is an effective way to obtain needed cash if you are unable to secure extra credit through other methods. Payday loans are also sometimes referred to as "cash advances," since they are expected back when you are paid from your place of employment. Loans can be given in multiple forms – such as cash, or deposited directly into the borrower's account.
Generally, interest is applied to the loan that is expected to be paid back at the time of repayment. The interest can range greatly depending on the institution, and what part of the world the person resides in. Some payday lending institutions perform a credit check and/or employment verification. These measures are taken in order to ensure that the borrower will be able to repay the loan.
In the traditional model of payday loans – the lender expects that the borrower will repay their loan (plus interest) in full on their next payday. Payment is possible through numerous methods – the borrowers account may be debited, they can provide the lender with a postdated cheque, or they can pay in cash. If they are unable to pay and the funds are not in their bank account, this will result in bounced fee – which can sometimes be negotiated.
Conveniently enough, payday loans are also available online. This process involves completing an online loan application form. In this case, the funds would be directly deposited into the borrower's account, and then electronically withdrawn on the next payday (expected repayment date).
Payday loans are becoming increasingly popular, making it so important to know the elements that characterize a good payday loan. If you are considering taking out a payday loan – here are the things to consider when you are looking for the best online payday loans.
The internet can be a bit of a scary place. When you are looking for the best online payday loans it is important to ensure the credibility of the site you are considering borrowing from. Take a look at reviews online – are borrowers generally satisfied with their loans? Is the lender a well known institution? If anyone reports having issues obtaining their money, or complains of misuse of the personal information they provided, it is probably safe to assume that looking for a different lender would be in your best interest.
Low Interest Rate
Check out the cost of the loan. There are many different institutions offering payday loans out there, some with better deals and interest rates than others. Why would you accept a loan for 40%, when you could have one for 20%? As well, some lenders advertise different deals and specials, particularly if you are a first time borrower – example, first 100 dollar free. Take a look at what is available to ensure that you find the online payday loan that makes the most financial sense / the most reasonable rate.
Ease of Use
Consider whether the site is easy to use, and whether all the information you need is accessible. As well, take note of how much personal information they are requiring and if their process seems simple, or unnecessarily complicated.
Instant / Fast Approval
Some lenders advertise either instant or fast approval. Sometimes this can be quite beneficial if you want to obtain the money as soon as possible. If there is no lengthy approval process, this just makes everything a bit smoother.
When you are checking the reviews of the payday lender for credibility, take note if there was any mention of customer service. If there are complaints about lack of availability of people to speak in case of an issue, this might be a bit of a red flag. Plus, great customer service is hard to beat.
As you can tell, there is a lot of information that is important to know when you considering taking out a payday loan! But once you are informed it is so much easier to assess and find the best online payday loans available – and most importantly, the one that works for you!