Instant payday loans are short term, small capital and high interest loans that are used by the middle class to get some breathing space till the next paycheck comes. This means that the borrower would have a window till the next payday to pay the loan amount back along with the associated interest and other charges. Depending on the lender, the repayment period for instant payday loans may be adjusted according to the borrower. Depending on the borrower’s monthly income, the lender may lend an amount between $50 and $1500. This amount can be used by the borrower to take care of urgent financial emergencies. Instant payday loans are offered by thousands of lenders across the country. Generally, payday loans are facilitated by financial institutions who work as intermediaries to connect borrowers with lenders.
CONDITIONS YOU NEED TO SATISFY IN ORDER TO GET INSTANT PAYDAY LOANS
Lenders rarely take into consideration the credit status of an applicant. This makes instant payday loans an attractive option for borrowers who may have a poor credit score. A borrower has to satisfy the following conditions in order to be eligible to receive a payday loan:
- The applicant must be a citizen of the United States of America. During the application process, the applicant would have to furnish a proof of citizenship and residence.
- The applicant must be above the age of 18 years.
- The applicant must have a steady source of income. Lenders give the maximum weight-age to this point as it gives them assurance that the applicant would be able to pay the loan amount back by the next payday. During the application, the applicant would have to provide proof of employment or proof of income. Lenders may also give weightage to the time period for which the applicant has been employed with the current employer, in order to ensure that the applicant has a steady job.
- The applicant must have an active bank account. The transactions generally take place through this bank account.
APPLICATION, PAYMENT AND REPAYMENT PROCESS FOR ONLINE PAYDAY LOANS
Conventional loans from banks have a tedious application procedure and can take anything between 15 to 30 days for disbursement. There are multiple verification’s that are done during the process in order to gauge the eligibility of the applicant. In case of emergency requirements, this can be a serious problem. Payday loans solve this problem and hence are really handy in order to take care of instant financial needs.
- The entire procedure is online; hence you can apply for a loan after your working hours or even on a weekend. At the time of the application, a prospective borrower would have to provide some personal information along with the proof of citizenship, proof of age and proof of employment or a steady source of income. All the terms and conditions involved are available on the website itself, so that the applicant can go through them before applying for the loan.
- After the application, the details are sent to a network of lenders by the financial institution.
- The lenders would review the application and access the applicant’s capability to pay the loan amount back by the next payday.
- The financial institution would then send the best offer to the applicant and provide all details like the approved loan amount, associated interest rate, other charges, repayment date and possible penalties in case of late payment. The applicant would have to provide his or her electronic signature which means that the applicant accepts all the terms and conditions and pledges to pay the amount back on the due date.
- After the electronic signature is provided, the loan amount would be deposited in the bank account within an hour. At this point, the applicant either provides the lender with the authority to withdraw the due amount on the due date from the applicant’s bank account, or gives the lender a postdated check for the amount.
The whole process of application and receiving the amount in the bank account take around one to two business days. On the due date, the due amount is either debited from the borrower’s account or the lender cashes in the postdated check.