You may love them or hate them, but when it comes to financial assistance for bad credit, payday loans have no equal. Additionally, they offer a completely online process and lightning-fast funding. But with a bunch of predatory lenders that charge a high APR, many people keep away from payday loan debt.
Those who commonly use traditional loans may wonder whether it’s safe to obtain a payday cash advance. The short answer is yes, but you need to fully understand what type of product it is. To make things clear, let’s answer the question “How do payday loans work online?”
Online Payday Loans: Meaning and Features
An online payday loan represents a small amount of money that can be borrowed remotely. They are available with any credit score and for a relatively short period. As the name suggests, the due date is usually set by your next paycheck. This means that a borrower must return the loan within two to four weeks. To make it easier for a borrower to pay off the entire debt in one lump sum, payday loan amounts are limited. In most states, you won’t be able to get more than $1,000.
For a better understanding, let’s consider payday loan features:
Limited terms and amounts
You can get between $100 and $1,000 and will be obliged to repay the money in full by your next payday.
No focus on your credit background
Payday lenders are more focused on a borrower’s ability to repay the loan, not their credit score. Thus, payday borrowers don’t need to meet any minimum credit score requirements.
Soft credit checks only
A payday lender doesn’t require you to go through a hard credit check. It doesn’t review your credit report details or take any other actions that can affect your credit history until you pay back the loan on time.
Fast funding
You can get cash advance loans via direct deposit and access the money in your checking account in as little as 24 hours.
High costs
Payday loan interest rates are one of the highest in the entire lending industry. While an average APR is 391%, some payday lenders can offer short-term products with over a 600% APR. Simply put, you will be asked to pay an additional $10 to $30 for each $100 you owe.
Is It Really Possible to Get a Payday Loan Online?
Payday lending is moving toward the digital era. Thus, getting a payday loan completely online is possible. People can now borrow money in a few clicks by using their PCs or smartphones. Many direct lenders offer payday loans with no faxing that don’t require paperwork at all. From start to finish, you can enjoy a remote and digital process from the comfort of your home. Moreover, you don’t need to visit a store even to repay payday loans. Just provide the lender with access to your bank account and make sure there’s enough money in it when the payment date comes.
Benefits of Dealing with Online Payday Lenders
Dealing with an online payday lender offers several benefits. Here are a few examples:
- Convenience. You can apply for a loan at any moment by following a few straightforward steps;
- Speed. Online lenders can provide borrowers with cash within one business day;
- Accessibility. Payday cash advances are more obtainable than traditional personal loans. Borrowers with poor credit can be sure they won’t get rejected just because of their poor credit scores.
- No security deposits. Payday loans are unsecured options. You can get one just by putting your signature in a loan agreement;
- No impact on your credit history. Payday lenders perform only soft pulls before making loan decisions.
How Can I Get a Payday Loan Online?
The process of obtaining an online payday loan is very straightforward. This is how a payday loan works:
- Borrowers fill out an online application form and provide basic information about their employment status, income, and bank account.
- The lender reviews the application and responds within one hour.
- If approved, the borrower reviews loan documents and accepts an offer if it suits them.
- After signing a loan contract, the funds are typically deposited into the borrower’s bank account within one business day.
Who Does Payday Loans Near Me?
The best thing about payday loans online is that you don’t need to waste time searching for a branch located near you. You can apply online in a few minutes and get money without visiting a physical store. Just do your research on the Internet, compare several options, and apply for the best deal.
Things to Avoid When Getting Online Payday Loans
Upfront fees
Avoid paying anything before you receive cash. Charging high fees in advance is a feature of predatory lenders.
Sky-high interest rates
Although a payday loan has a higher-than-average interest rate, make sure the one that is offered to you is reasonable.
Late payments
Paying late always results in high penalties. Additionally, a lender can send your debt to a collection agency.
