Online payday loans - What it is and how good they are
Table of contents
What is an online payday loan?
A payday loan is an instant short term loan which covers your immediate expenses until your next payday. There are lots of online payday lending websites which transfer money directly into your bank account within a few hours of approving your application. The loan payments and the finance charges are electronically withdrawn from your account on the next payday. In emergency situations, online payday loans offer you the quickest solution to your immediate needs. However, online payday loans come with huge APRs, which will spiral out of control if not repaid on time.
What is the maximum loan amount available?
Online Payday Loans are available within the range of $100 to $1,500. The exact loan amount you are eligible for is dependent on your income.
How soon is the money transferred to the checking account?
Since the transaction is online, the money transfer is usually fast and hassle-free. The money generally gets transferred into your bank account within 24 hours after approval of your application. Some online payday lending services have the money deposited in your account within 3 to 5 days. However, for some additional charges, lenders will directly deposit to your bank account on the same day.
What makes you eligible for an online payday loan?
In order to be eligible for an online payday day loan, you must be a US citizen over 18 years of age, with a stable income of at least $1,000 per month, and a checking account. Some companies require you to be employed with your current employer for a certain length of time, usually 3 to 4 months.
What is the maximum period of the loan?
Online payday loans are usually lent for 14 days. However, depending upon the frequency of your pay, you may also get an online payday loan for a 21 to 28 day period. The fees are normally structured for 14-day periods and are higher for longer periods of time.If you fail to repay the entire the loan money along with the fee by the end of the agreed period, most lenders will settle for the fee and extend the payback time span.
Some online payday lending services would even allow a renewal every 14 days, provided you pay the fee regularly. Others will set up a payback plan for gradual repayment of your loan if it has been in default for a long time.
Financial fees charged by online payday lenders range from $10 to $30 on every $100 for a period of 14 days. The borrowers are mostly charged around $25 per $100.
Limitations on use of Online Payday loans
Usually there are no specified limitations on use of online payday loans. You may use them for any purpose you find essential.
Can an online payday lender lend multiple loans?
Usually your online payday lender decides whether you can have more than one loan from that company. Some lenders require you to repay your existing loan in full before they can consider another loan application from your side. However, many others do renew an existing loan by adding on to the present loan.