A payday loan is a short-term advance used as an option to assist an individual with small, often unforeseen expenses. It is also known as a payday advance or payroll loan. Because of the exceptionally short-term nature of payday loans, they are not intended to meet long-term needs. It is advised you shop around and explore the companies around for comparison. The Annual Percentage Rate (APR) and interest, when compared to the traditional signature loan, seem extreme with its clause of 400% annual interest or more. To borrow for example $100, the finance charge ranges from $15 to $35.
Loan Stores: Stores that sell financial services, also referred to as loan stores, make payday loans available. Before a person is offered a payday loan, there are requirements he/she has to fulfill. They include opening a bank account in good standing, identification and a steady source of income. On getting the necessary requirement in place, the borrower visits a payday loan store and secures a short-term loan.
The payment is due in full when the borrower’s next paycheck arrives. From the borrower to the lender, the amount borrowed and additional charges are written in a postdated check. The duration of the loans are for 30 days or less, rolling overpayment is possible. The rolling over of payment incurs additional charges. The date in which the loan is due for payment is otherwise referred to as the maturity date.
The borrower on the maturity date is expected to repay the loan in person at the store with the check handed back. The check is processed if the borrower fails to make payment. If perchance the check bounces because of the insufficient fund in the account, the financial institution will charge the borrower for a bounced check fee.
Unfortunately, this also attracts an additional charge from the borrower as payment was not made when due. The borrower’s account is debited for both the payday loan payment and the bounced check fee due for the bank. It is best to contact the payday loan company upfront when you are certain about your inability to make payment when due. This is advised in other to avoid Loan Company depositing your postdated check at the bank.
Online Payday Loan Services: with the advent of technology, loans can be requested on the internet. A good number of people consider visiting payday loan stores as the option for when the going gets tough. They regard it as an indirect sign of financial turbulence, as it is with visiting pawnshops. This resulted in the number of payday loans running online platforms.
Online payday loan companies marketing strategies are via online search, paid ad campaigns, referrals and e-mails. Registration is over the internet or the completed registration form can be faxed. The requirement mentioned earlier will also be required during the verification stages online. On verification, the borrower transfers the following documents by faxing. The documents include copies of recent bank statements and copies of a check. On completing verification, the can be requested and approval is guaranteed.
When the payday loan is approved, payment of the loan is directly deposited into the checking account provided by the borrower during registration. If you have the necessary utility for faxing in your residence, the whole process will be easy and fast.
The only time you will leave home concerning the payday loan is whenever you will be visiting the ATM for withdrawal. Most recently, the good news for the individuals without fax machines is that there are ad campaigns on the internet relating to online payday loan companies stating faxing is not required.
The difference between Online payday loans and In-stores payday loans is that for online payday loans, the same way the loan was offered is the same was the payment is requested. It is very important to ensure that your account is funded before the due date for payment.