Tag Archives: payday loans

How do Payday Loans Work?

payday loans

Payday loans are basically short term loans which can be very useful during a financial emergency. The term was coined because the loan is tied up with the borrower’s source of income. This type of loan may appear to be very convenient for some people who are strapped for cash but acquiring this kind of loan can sometimes be tricky and stressful. Therefore, it is important for borrowers to do their research first so they will not end up in a lot of debt.

Payday loans are called short term loans since the borrower has to pay the loan amount within 2 weeks or so. The loan amount is usually modest since lenders do not typically release large sums of money for this kind of loan. The borrower must first issue a check for the loan amount plus fees. If the borrower is not able to pay the loan amount on the agreed schedule, then they can ask the lender for a roll over so that the loan will be extended. This is probably one of the worst things that can happen to a borrower because the fees will keep on building up. Fortunately, some states have already limited or regulated the number of roll overs for the borrowers.

 

Are payday loans worth the risks?

Payday loans may save your life especially during desperate times; but in reality, this type of loan can be ridiculously expensive. Borrowers must pay an APR or annual percentage rate that could be a lot bigger considering that the loan period usually lasts for 2 weeks or so. Another major pitfall of a payday loan is the cost that it entails. The fees on top of the loan amount are usually high plus interest rates.

However, payday loans can still work for anyone as a short time solution. As a borrower, you just have to always keep in mind the due date of the loan and it will also help if you deal only with legitimate and trusted lenders.

Payday loans are mostly offered by private lenders but because of its popularity; banks are now offering this kind of loan provided that the borrower will be able to comply with the requirements. Loaning from a bank is a better alternative from traditional bank loans. However, the process and pitfalls of a payday loan from a bank is basically the same as from a private lender or financial institution.

Now despite issues, if you still think that getting a payday loan will solve your problems, then here are a few things that you need to carefully consider:

  1. Do your own research online or by asking referrals from your friends or colleagues. Ensure that you take the time to read about lenders and what they have to offer.
  2. Always read the fine print. Better yet, look for a lender that offers deducted fees or even minimal interest rates.
  3. Be mindful of your due date. Make sure that there is enough money on your checking account so that the payment will be processed.

Reblog: Typical Payday Loan Process

By Chadwick Davis

WHAT CAN I EXPECT FROM THE TYPICAL ONLINE PAYDAY LOAN PROCESS?

The world of online payday loans can be an intimidating and controversial one for consumers. With all of the negative hype and confusing misconceptions circulating, consumers often don’t know whether an online payday loan is the right financial alternative for them and their situation.

The truth is that an online payday loan might just be the answer you’re looking for! At the very least, the option of a payday loan is always something worth looking into, especially if you find yourself in need of immediate financial relief.

This article is intended to clear up some of the confusion and illustrate the typical payday loan process. Obviously, different companies will have different ways of conducting business.
In no way does this article represent the full and exact process for each and every payday loan company that you find online. It is only intended as a general guide for the process and what you can expect from a typical, respectable payday loan company.

Always fully research any company you plan to do business with prior to completing any transactions.

WHERE DO I GO?

First you will need to access the payday loan website. Typically, there are two kinds of payday loan sites on the internet.

1. A Payday Loan Lead Site.

o Normally a customer will search for a payday loan site and come across a “Lead Site” thinking it is a payday loan company. “Lead sites” are hosted by companies whose main goal is to gather information from several potential customers, and then sell that information to companies that will further review it and potentially lend you the funds you are requesting. Lead sites are normally identified because they do not have a member log-in section on their homepage. Also look for a disclaimer somewhere on the website which states that their main purpose is to generate name leads for financial loan companies.

2. A Genuine Payday Loan Company Website

o You can usually recognize genuine online payday loan sites by searching for a member’s log-in area. These sites are direct lenders for customers who apply for a loan via the company’s website. These companies are responsible for processing the applications in-house and depositing the funds into customer accounts once the loan is approved.

GENERAL REQUIREMENTS:

Customers should always research any company they are planning to do business with. After identifying the company you would like to use you will likely need to fill out a loan application. Online payday loan companies will have their own general pre-designated requirements in place that must be met in order to qualify for a loan. Examples of this may include the following:

o Active Direct Deposit
o An established checking and/or savings account that allows unlimited ACH deposits and withdrawals (Established for three months or more as a general rule)
o A minimum monthly take-home pay amount (Generally around $1000)
o An established employment history of 3 months or more
o US citizenship
o Applicant age of 18 years or older

Online payday loan companies tend to be very specific and forthright about all of the requirements in the loan application. Be sure to fully read and understand all of the terms prior to signing the agreement.

After you have fully and truthfully answered all of the questions on the application a determination will be made regarding the approval or denial for the loan. Different companies rely on different systems when researching applicants. Reasons for denial may include the following:

o Active “write-offs” or a bad payment history with other payday loan companies
o Non matching information on the application (i.e. – Social security number does not match name given on application)
o Lying on an application
o Applicants, spouses of applicants, or dependants of applicants who are on current active duty with any branch of the military (Federal law prohibits these individuals from doing business with payday loan organizations)
o Excessive loan inquiries with multiple payday loan organizations
o Recent poor checking or savings account history
o Excessive amount of current payday loans still outstanding
o False reference or employment contact information

TYPICAL FEES:

Once the loan is approved, the funds will be scheduled to transfer into the customer’s account. The customer will be notified of the date in which the loan will need to be paid in full. In the event that the customer is unable to pay off the payday loan debt on the agreed upon date, “extensions” can be requested. These extensions usually have a fee associated with them. The fee and a full explanation of the extension process should be explained in the original loan agreement. The purpose of an extension is to extend the amount of time before the full loan payment is due again. Customers are generally allotted a specific number of extensions that can be used during the life of a loan. Once this number is reached no further extensions can be requested and the full loan payment amount will be due.

Another fee which may occur, and should also be explained in the original loan agreement, is what is normally referred to as an “NSF Fee”. This fee is charged when attempts to retrieve scheduled payments are made and the customer’s bank rejects the attempted withdrawal due to Non-Sufficient Funds. Typical NSF Fees are around $20.

Note: Customers living in specific states may or may not be able to utilize the extension process, depending on state laws that govern acceptable payday loan processes. Other related state laws may exist and dictate different aspects of the payday loan service. Customers should always research their specific state payday loan laws and regulations before entering into an agreement online.

THE BOTTOM LINE

Online Payday Loans don’t have to be an intimidating or confusing subject. Responsible customers often find them to be the perfect solution for a tough financial situation. The ball is often in the customer’s court when utilizing this option since all of the terms, fees, and guidelines of the payday loan process are readily available prior to accepting any agreement. The key to any successful payday loan transaction is the customer’s grasp in understanding the process and anticipating the way it will play out.

In addition, when doing business with an online payday loan company, customers should also look for an in-house Customer Service Department line. This service can act as a life-line for customers who become confused about any aspect of the process or who may have general questions.

Article Source: http://EzineArticles.com/?Typical-Payday-Loan-Process&id=1312694

5 Types of Borrowers Who Need Payday Loans

A lot of people have wrong notions that only those who have bad credit score, do not have bank accounts, and rejected by banks and other lending institutions are qualified to apply for payday loans.  This is all wrong as there are other types of borrowers who also need the services of payday loan companies.  Let us enumerate some of such people.

  1. Those who are embarrassed to borrow from their friends.  These borrowers believe that one of the ways to kill a friendship is to borrow money from friends.  Even though they will pay it, they do not want to create the impression of abusing friends. Indeed, you will never know what your friends will say after giving you the money.  Thus, to avoid bitter stories, many borrowers prefer borrowing from instant loan companies.
  2. Those who are not fond of borrowing from family members and relatives.  Yes, there are people who are indeed secretive and do not want news to spread around the family and relatives that he or she is experiencing monetary problems.  Thus, when borrowers want to borrow from payday loan companies, it’s their way of preserving dignity.  And sometimes, relatives are quite nasty; they create gossip as to why you want to borrow money from them and spread it amongst other relatives.
  3. Those who do not want to use company privilege yet and reserve it for more pressing matters.  Although this is quite odd, some prefer paying more expensive loans than availing interest free loans from employers.  However, there is logic after all as you cannot tell when more pressing matters occur.  It cannot be helped that employees will think that borrowing or securing a loan from employers can also bring about a negative impression and employers might conduct a lifestyle check on the employee in order to have answers as to why employees are borrowing money; and this is a violation of employee rights and privacy.
  4. Those who are not really comfortable borrowing from their banks.  Again, they might reserve the privilege for more important financial situations to come in the future.  And borrowers do not want to taint their record with their own bank by taking out a loan and failing to pay unwittingly.  There are really people who find bank employees arrogant and quite a snob and they do not want to feel like being ignored or left out when they are not entertained well by bank employees.
  5. Those who do not have time to fill up loan application and submit to rigid interviews and answer embarrassing questions.  In addition, they do not have the time to gather documents to present as evidence that they can actually repay the loan.  Payday loan companies are the most convenient source to have money even if it is not for emergency purposes.  Some people just do not want to share too many personal information.

There you have it, here are different kinds of people who need payday loans.  As you can see, these people do not necessarily have negative credit score and really need money but rather, they are just protecting their integrities and payday loan companies help them achieve this desire.

For payday loans Montgomery, AL and throughout Michigan, Virginia, South Carolina, Tennessee, Alabama, Mississippi, Louisiana, and Oklahoma, contact Approved Cash Advance.

7 Reasons Why Payday Loans are Popular

According to statistics, about 80% of employees have availed of payday loans at least once during their entire career while working. Most have not borrowed again afterwards due to the fact that interest rates are higher compared to other types of loans. Although there are no hidden charges, there are penalties for late payments. Thus, it will be better not to avail of this type of loan if the expenses can actually be postponed and if there are other means to acquire money other than borrowing.

But for those who have actually benefitted from borrowing a payday cash advance once or more, these are some of the reasons why this type of loan is popular:

  1. No credit checks. Other loans will require rigid credit verification that may make the borrower feel intimidated especially if they have poor credit standing. Payday related loans do not employ credit checking bureaus for strict credit checks.
  2. No collateral needed. Auto loans, home loans, business loans, and others will require collateral in exchange for loans to be granted. Cash advance loans on the other hand does not need any collateral.
  3. Minimal requirements. What’s required of a borrower is only minimal. A borrower must meet the following criteria: must be at least 18 years old, a citizen of the country where the loan is offered, employed with a stable income, and owns an active bank account. Funds will be deposited to the said account once the loan is approved. The same account will also be utilized to debit payments during the repayment period agreed upon.
  4. Easy application. Most payday advance loan providers today process applications online through a form which can be filled out within 5 minutes. Application forms can also be returned through fax or processed over the phone. In some cases, depending on the company where you apply the loan from, interviews may be conducted over the phone for verification purposes. But there is normally no physical appearance needed, not even during signing of the contract because digital terms and conditions can be emailed or faxed from the broker to the borrower and back again. Even a physical signature is no longer necessary because it can be replaced by affixing a digital signature instead.
  5. Fast approval. You can expect loan applications to be approved after a few hours when you apply. This is because your application is immediately endorsed to expert brokers who will in turn look for financers who will fund your loan.
  6. Direct deposits and debits. Funds are conveniently deposited directly to your bank account within 48 hours after the loan has been approved. Payments are also debited through the same account so you won’t have to pay in person.
  7. No hidden charges. Although the interest rates appear to be higher when compared with other types of loans, this is because the repayment period is spread out within a limited period only. Penalties on the other hand can be avoided when you pay within the payment period agreed upon. You are at least assured that there are no hidden charges.

These are just 7 of the reasons why payday loans are popular. There are more which can be included here based on a borrower’s experience.

Australian Pay Day Loans or Cash Loans

You probably heard about payday loans or cash loans countless times. Although most articles discuss about pay day loans in general, not all terms are applicable for every country. Thus, you need to understand how it works in your location in order to take advantage of this type of loan.

In Australia, cash loans function similarly. These are offered as a quick solution to an immediate financial need. But not everyone in Australia can take advantage of pay day loans. There are certain conditions you must meet in order to qualify for this loan type.

Although Australian lending institutions may impose specific rules for their own cash loans, but most lenders will agree to the following guidelines:

  • a borrower must be at least 18 years of age
  • should be a resident or citizen of Australia
  • must have a permanent job (at least 5 months or so)
  • average monthly income must not be anything less than $1000 AUD
  • possess a valid social security number
  • should own an active Australian bank account

As mentioned, some of the requirements may slightly differ with additional terms for some companies but the guidelines mentioned above will at least give you an idea whether or not you qualify to apply for pay day loans. Some lenders may conduct credit checks while some will not. If credit verification is conducted, it means that there is a possibility that your cash loans will not be approved in case of a bad credit score or poor credit history.

As for collateral, it is not required by a majority of lenders. Approval period also varies to as fast as within 5 minutes to as long as 5 business days. Once approved, the loan amount will be credited directly to your bank account. Application on the other hand is accepted either online or in person with the need to physically present proper documentation or send them via fax for verification purposes. You may refer to your chosen financial institution for specific terms and conditions.

Other variations is evident in terms of loan amount allowed and repayment period provided. Cash loans amount in Australia starts at $50 AUD to as high as $1,500 AUD. The repayment period on the other hand is normally within a week or seven days to as long as three months on maximum. Again, you may need to confer with the lending company of your choice to find out how much they can let you borrow and how long they allow you to pay for the loan. You should also learn about other relevant information including interest rates or late payment fees, if any. You may even need to sign contract which enables the lender to file a lawsuit against you in a local Australian court in case of non-payment of your pay day loans.

With this information, you now know how Australian pay day loans or cash loans work so you can be confident enough in case you apply for one.

Features of the Best Online Payday Loan Lenders

Review websites have come up with different results as to which are the best online lenders of payday loans. Some have at least one or two company in common while other reviewers merely compared the agencies according to specific factors such as loan amount, terms or conditions, fees, interest rates, requirements, approval duration, mode of application, and so on.

Although no one hopes to ever go through a need to apply for a loan, online or otherwise; yet, if there may be time when it does happen, you can ponder upon the factors enumerated above when deciding where to apply for an online payday loan.

But what is payday loan? For those who do not know this concept yet, payday loan is a short term cash borrowed intended to cover immediate expenses whether emergency or not but are meant to be paid for during the next salary. This is similar to a cash advance but you utilise resources from a third party source and not your actual employer.

The best online payday loan lenders in general can be easily spotted with the basis listed above. If a lender offers as high as $1,500 in amount with minimal fees as well as low interest rates and only a few requirements which can be returned through fax documentations or online email attachments with loan approval response within a day and a check sent fast too, then this is the best lender to beat. Although in truth, only one or more of these and not all is offered by online lenders.

Sunshine Brokers of Australia

In Australia, there is a lending institution which can actually offer all the benefits and features mentioned in the previous paragraph. Some of these include the following:

  • loan amount reaching as high as $3,000
  • online application form can be accomplished in minutes
  • documents and requirements submitted online as well or via fax
  • approval of loan expected within hours after application
  • sign contract online with no personal appearance needed
  • funds deposited directly to your bank account once approved within the same day upon approval
  • company has been in the loans industry since 1999

With these, Australians who are of legal age, employed, and with an active bank account can now take advantage of payday loans.