How Do Payday Loans Online Work?
You may know how payday loans work in general. If not, here’s a recap.
If you have bad credit or have recently experienced a bad financial situation in your family, you may not have the ability to get a loan. When an urgent problem arises then, and you need some funds quickly, you might consider a guaranteed payday loan, a loan for people with bad credit and/or that requires no credit check and which does not look at your overall debt, only your next pay check coming shortly.
You might have seen payday loan lenders when you were out driving around, or perhaps not. Not all states permit these kinds of businesses in their states. If your state does not, or even it your state does permit these businesses to be physically located in your place of residence, you might still turn to online payday loans.
If you do want to apply for and get payday loans online, here are some things to know, to expect… and to watch out for.
What are online payday loans?
These are guaranteed cash loans for bad credit borrowers who need cash quickly without the usual approval requirements and processed online. You can apply online; get approved, and receive an email of that approval online; sign your documents which are right on the website or sent to you via your email, online of course; and watch your bank account get automatically credited (and then debited) from your bank account, that is if you can see your bank account online.
Are payday loans online legal?
Yes, they are legal. Even if it is illegal in some states for payday loan lenders to have a store front business in your state, you can still legally get a payday cash advance loan online.
Is there a specific way as to how to apply for a payday loan online?
There is a fairly standard way of applying. Nothing will be much different from one lender verses another. You will pull up their application on the company’s website and complete the form.
Information you need to provide will probably include your name, address, phone number, email address, driver’s license number and state, social security number (yea that stinks, but they will most likely require it, and birth date.
You’ll also have to input your income source, employer’s phone number, position held, length of employment, amount of take home pay, your last pay date, and the frequency of your paycheck.
Either on your application or shortly after your loan amount has been processed, you’ll be asked for your bank’s name, your bank’s routing number, your bank account number, and the amount of time your account has been with this bank.
If you are working with a lender who works with debit cards instead of debiting your bank account, they will want to have information about the debit card they will be debiting.
Every application you complete will also have a question as to whether you are active duty military or not. While there are special bad credit lenders for military active duty personnel, the federal government does not permit active duty military members to get regular payday loans. Retired can do so, but not active duty military members.
When I apply online, how long will it be until I know what loan amount I will receive?
Sometimes you can complete an application form right on the lender’s website and know immediately how much you will receive. An online processor on the website could list your loan amount there in a few seconds.
If there is no automatic processor on the site, and if you complete the application during earlier business hours and submit it online for the lender to physically review (still no credit check), you will generally get a call or an email in a couple of hours. Some might be faster, some a little slower, but it won’t be long. When they call, they will have the loan amount you can receive which, as I mentioned in an earlier post, is based on your income, not your credit score or other debts.
If you have applied very late in the day or on a weekend, it may be the next business day before you receive word on the loan.
Will I have to sign a contract when I get a cash loan online and if so, how?
Yes, and here is how. When your loan amount is processed and accepted, and before the funds are released to you, the lender will require some signatures on a contract from their company.
If you applied and saw your loan amount listed on the website right after you completed your application, the lender’s contract will probably display right online for you there too after you accept with marks where you will need to either type your name in or type your initials in. Those electronic contracts are real contracts, and your typed “electronic” signature is considered every bit your signature as if you had used a pen and signed in cursive.
If your lender emails you in a few minutes or so after you have submitted your info, they may email you a URL you can go to where you can see the contract and provide your electronic signature there.
A contract can be easily done over the web, but know that it WILL be done before any funds to be released to you. The good news is that you can see and save the contract and even if it was done right on the website, you can always log in, open the contract, and print it, even at a later time if you need for any reason.
When will I receive the money, and how?
Online payday lenders will generally have your funds into your bank account the very next business day. If you need it more quickly, and the lender can or will do so, you might be able to pick cash up at a local cash business or Western Union location in an hour or two. I have even seen a few who will send money to Walmart’s customer service from which you can simply pick your cash up there in a couple of hours.
Usually though, you can apply early one day, get approved later in the day, and see your funds sitting in your bank account the next morning when you wake up.
Verify times with the specific lender you are speaking with though.
If you KNOW you need the funds in 24 hours or less, and if the lender you are working with online can not move that quickly, a local payday store, if you have them in your state, may be much faster. You can walk in and basically walk out with cash if you apply at a physically location.
There are a very few online lenders who offer those 1 hour loans. Literally instant payday loans like that are more guaranteed to be “instant” if you walk into a payday loan store, the physical door of an advance payday lender’s office where they can take your info and give you the money in cash, or a check from their local bank, right there.
Online payday loan lenders can be quicker, though, if the lender states it can send money to a cash transfer location close to you, something akin to a bill payment service center or wire transfer location.
All online, including an online bank transfer, a deposit right into your bank account? You may be talking about 24 hours or so (more or less), depending on when your loan was received and processed in the day and whether or not your application was submitted on the weekend when your bank is closed.
How do I pay the debt down on a payday loan I’ve taken from an online lender?
You probably won’t have to worry about that except to have the funds in your bank account or on your debit card when your payment becomes due. The lender will automatically take the funds out of your bank or other account when it’s due.
Can I just pay just a portion of the cash advance I received if I don’t have enough to pay the entire cash loan back on my next payday?
That depends on the company, but usually there are options for paying just finance fees and then a portion of your principle. Some online lenders will even give you two or three finance fee only payments before they require any of the principle to be paid down.
Each time you just pay the finance fees (basically like loan origination fees), your remaining principle will carry over for a new payday loan, a new round of finance fees (loan origination feed) added again, and you start the process all over again. These are called payday rollover loans or just rollovers, and while it is not wise to keep these cash loans going with new fees that don’t even help with your principle added every month, it can be done.
If your lender permits partial payments and rollovers, you will easily see that service listed on their website.
Can I pay more than my finance charges if I want to, or more than I’m scheduled to pay back on the principle? How can I pay extra on online cash advance loans?
When you get payday loans online, the company will usually give you the ability to create an online account and log in to see your account and make changes. If you want to pay more, you will most likely have the ability to add the additional amount there manually.
Some internet payday loan companies have set up paybacks which automatically go into affect, ready to go as is unless you add additional sums you want to pay. I’ve seen some companies that will allow you to just pay finance charges only for three months, rolling the principle over each time, but then adding the requirement that you have to pay at LEAST $50.00 a month extra per month until the loan is paid off.
If you have a large amount, the company might require a higher amount of principle paid each month in addition to your flat finance fee (new loan origination fee).
Remember, as with any cash advance loan, the best thing is to pay the entire loan back when it is first due.
Second best would be to pay as much of an additional amount as possible off the principle. That means paying the high finance charge and THEN paying a lot, or at least a little, extra to help pay your principle down too.
The more you pay down your principle, the less your finance fees will be on your payday rollover loan.
Even if you don’t get the entire amount paid back at the first or second try, the more you can get those finance charges down, the more you’ll be able to pay off the principle you owe until one day soon, and you’ll get that entire cash loan paid off.
What will happen if I get an online payday loan and don’t have the money in my bank account when the due date arrives?
You may find yourself with fees, overdraft charges, and other problems with your own bank then if the lender submits the computer drafted check for the full amount due you signed in your contract, all with your advance permission through your contract signature, giving the lender permission to do in a circumstance which you failed to make your minimum payment. Depending on your contract, if you and your lender agreed to work through debits and not use an electronic check, and you signed that contract to debit the full amount should you not make a partial payment along the way, you may see an automatic charge for the full amount go through your account the day your paycheck arrives, again your having signed the contract that this would be done should you just not make your minimum payment to them.
However, while payday lenders are some of the strictest lenders around (they deal with high risk loans; they need to be), they WILL sometimes work with you if there is just a day or so delay for some reason and you give them time to make proper adjustments. You might still feel some “heat” from them, but if you call them a few days in advance, or at least as soon as possible, the company may be able to delay any debit from your account for a day or so… perhaps.
Make sure you realize that many online contracts (and well, local ones too) stipulate that the lender has the right to debit the entire amount, all finance fees AND the entire principle amount in the event you do not pay the minimum of what you owe on the due date.
If you don’t have the money you need in your account, and nothing has been worked out enough in advance (and give yourself some days if you can to allow the lender to adjust the bank’s debit), you could find a debit on your checking account for the entire amount you owe, the entire amount.
Online cash loans today means having money in your bank account later to repay those cash loans given to you. Have at least the minimum amount of money in your account when it is due, and you shouldn’t have any complications with your payments or account.
Are there some other things I should know about getting payday loans online?
Yes, and we’ll be covering them here in later posts. Stay tuned! However, for now, this should help you basically understand how to get payday loans online to help your family through a difficult time.
This is the 5th article of a series of articles on no credit check loans for people with bad credit.
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