Online pay day loan are a valuable option for customers who cannot get loans from anywhere else. Customers may have poor credit history or they may be working at very low income jobs, which automatically exclude them from getting loans. Banks may also ask these poor risk customers for co-signers or security in the form of property papers or car documents and it’s just not possible for poor customers to provide this. Payday loans online are perfect for these consumers as they have a simple application process, affordable interest rates, short terms and quick payouts.
How does the online pay day loan system work?
1. Find a good website — Most payday websites advertise their services aggressively. In the last decade, the industry has exploded due to the demand and online websites are a dime a dozen. Along with online websites, most companies now also have real time stores where customers can walk in with the relevant paperwork to get a quick cash loan. We recommend you find a national chain which has a good reputation to borrow from.
2. Check the reputation of the website — The payday industry is regulated by the authorities but problems do happen. Loan shark websites, scams websites and fraud websites are common. With a little care and effort, you can easily avoid these websites and find a reliable, well-known chain. We recommend that you check the reputation of the website by using consumer review websites, the Better Business Bureau and government financial websites to get an idea of how the company works.
3. Watch out for brokers — Unfortunately, this happens to be a very common problem and several people get caught in the broker web. Broker websites advertise their services as payday websites. Consumers mistake them for lending organizations and apply to them directly. The broker company will then forward your details to a real payday lending company and collect a commission from you and the lending company for brokering the deal. This is not illegal but it automatically increases your interest rates and the repayment amounts.
4. Fill in the form — Payday websites encourage customers to apply online as they have customer representatives working 24-7. As soon as you submit the form, the loan officer will contact you and discuss your loan requirements. Once your loan is approved, the company will email a contract that you have to sign and return.
5. Read the contract — Almost every company will send you an electronic contract for verification. Read the contract and verify the details. The contract should contain the amount you have taken, the interest rate, the repayment date and amount and any additional fees that may be charged. Return the contract as fast as possible to get your loan.
6. Approval and cash disbursal — Payday companies usually approve all loan applications on the same day of application. That means as soon as you send in the contract, the loan officer will log in the contract and sanction your loan. Make sure that you have provided a current account in which the loan payment is to be made. The cash will appear in about 1 hour in your account and you can use it as you want. You might have to notify your bank that you are expecting a cash deposit.
7. Repayment — The loan company will call you a day before the loan becomes due. This is a courtesy call and it will serve to remind you that the loan is due.
Once you have paid back your first online pay day loan, the lending websites automatically raise your trust rating. You will also be eligible for higher cash loans with time.