Online payday loans are pretty easy to obtain. They are useful when you are short on cash, or have an emergency. Payday loans are very short-term loans intended to cover small, urgent expenses until your next payday. They should only be used when you can repay them within the promised timeframe. The speed and availability of online pay day loans comes with a big cost in the form of high interest rates.
Payday loans, online or in person, are usually used by people with poor credit. One of the attractive features of online payday lenders is that they do not perform a credit check. Another is that you can have the funds transferred directly to your checking or savings account, sometime even the same day you are approved for the loan, and almost always within 24 hours (next business day).
Some online lenders require that you fax them documentation, such as a paycheck stub or other proof of employment. Some require that the borrower sign and fax back the loan application. If this is going to be difficult for you, shop around for a lender that does not have these requirements. These are called faxless payday loans.
Particularly when applying for a payday loan online, it can be easy to just click through all the information in the application and other disclosure documents. Make sure that you read and understand all the details regarding your loan, including the rate, late fees and penalties, whether or not extensions are available, etc. Many borrowers don’t. The federal Truth in Lending Act dictates that lenders disclose this information during the application process.
As a borrower, you have many choices when going online to get a payday loan. Shop around for the best deal. Compare rates and fees, see how easy it is to apply, and understand what happens if you are late in repaying. You might also call customer service before you take out the loan, to see how easy or difficult it is to speak to a live person instead of a machine if you have an issue.
When you go online, have all your financial and employment information available. Sometimes a customer service agent will need to contact you by phone for further information or clarification.
Some of the sites you click on might be “brokers” for online lenders. They have a relationship with one or more lenders, and take your information and pass it on. They then get a “referral fee” if you are approved and take out a loan. There is nothing wrong with this, however, understand that they are being paid by the lender, so it is up to you to make sure you shop around and get the best deal for yourself.
