How To Apply For A Payday Loan Online

A woman is shown on her laptop applying for a payday loan online
The Rise Of Online Banking And Credit
Part 1 The Impact Of Internet Loans
Part 2 Advantages And Disadvantages Of Online Banking
Part 3 What Do You Need To Open A Bank Account Online?
Part 4 How To Apply For A Payday Loan Online

There has been a steady increase in the amount of online lenders offering payday loans and this looks set to go even higher in the near future. Payday loans offices are plentiful in most of the states but if you want to apply online for a short term loan it is quite a simple process. In this article we examine:

  • Applying online for a payday loan
  • How much you should borrow
  • How to receive your loan
  • Managing your short-term loan repayments

However, before going down this road it is also important to look carefully at all the alternatives as this kind of loan can be expensive. A payday loan should always be a last resort option.

Finding the right payday lender

This first step is the most important when you are applying online for a payday loan. Check out the website and look closely at their policies. Make sure that you are aware of all the fees and charges that can be incurred as well as finding out the interest rate and the total cost of the loan.

Approximately 12 million U.S. citizens take out a payday loan each year

Application forms for online loans are often partially hidden and if this is the case you may start applying only to discover more details about charges further along the line. Look at reviews from other borrowers or refer to local consumer groups for more information about specific lenders.

How much should you borrow?

This part of the application is very important and you must be sure that you can pay back the loan in full and on time. Never borrow more than you actually need even if it is offered. Late payment fees can soon rack up debts that may be difficult to pay off so draw up a budget to ensure you can make the payments.

Completing the application form

Before you start filling in the application make sure that you have all that you need close to hand. All lenders will require details of your bank account and how long it has been open, contact information with a phone number, proof that you are over 18, a social security number, proof of employment and earnings and details of your employer. It is also vital to be clear that the online lender can operate in your state. Each state has different regulations for payday loans with some more restrictive than others.

A young woman is shown facing financial difficulties with her loan repayment bills

Make sure that you are aware of the fees that will apply and what APR is being charged. The Truth in Lending Act states that payday lenders must be fully transparent about interest rates and charges. When the application has been completed you will have to wait for approval. This could be almost instantaneous or it could take a few days. It is usual for lenders to inform you by email if you have been approved or rejected.

Receiving your short-term loan funds

Once approval is granted the funds will be transferred directly into your bank account. At this point it is important to stress that as you have granted the lender access to your account, they will take out the money owed when your paycheck is next deposited. As long as the money is available when the debt becomes due, the transaction will be fully completed. If there are insufficient funds in your bank account you will be charged a fee and some lenders will continue to add interest to the loan amount.

The Truth in Lending Act states that payday lenders must be fully transparent about interest rates and charges.

Depending on which state you live in you may be able to extend the loan if you are not able to pay it off on the due date. Most states have a rule that lenders are required to set up a repayment plan for anyone who is in financial difficulty.

The future of online banking and credit

The rapid changes being applied to the financial industry means that banking and credit is now steadily moving towards a greater amount of online digital only banks. Using the advantages that come with the latest technology, there are also going to be new players in the game, so the public is going to have an even wider choice of lenders.

The highly competitive nature of finance means that you will be able to look for better rates and lower fees for all kinds of financial products. Whether you approve of this move or hate the thought of change, mobile banking and credit looks set to be the way forward for financial transactions in the US.

The Rise Of Online Banking And Credit
Part 1 The Impact Of Internet Loans
Part 2 Advantages And Disadvantages Of Online Banking
Part 3 What Do You Need To Open A Bank Account Online?
Part 4 How To Apply For A Payday Loan Online

About the author

David Warren

David Warren is an expert on personal loans across the United States. His career in banking has helped make David the loans specialist that he is today. He shares his analysis and insight into the personal finance industry on onlinecreditusa.com