What's the difference between traditional and online payday loans?
Traditionally, payday loans can be assessed from various outlets and offices across different cities.However,with the recent advent of smartphones, getting payday loans has been made easier.People can apply for loans from the comfort of their devicesin a matter of minutes.
A traditional payday loan requires borrowers to apply for a loan at aloan outlet.After that, they’ll have to provide a post-payment check, as well as informationon their job, pay stub, financial capabilities, and probably credit history. There is no hard inquiry carried out with this information because the point of payday loans is to give people with no credit card or with a payday loan bad credit a way out of small financial constraints.
On the other hand, online payday loanscan be accessed on the lender's website or their mobile app (if available). Online payday loansgive users the convenience of sourcing for funds instant and on the go.
Do payday advance online check credit history?
Several payday loans are often advertised as “Online payday loans for bad credit” or“ nocredit check loan.” Does this mean no form of credit history check is carried out? The answer is no. “No credit check loan” is a gimmick employed by many lenders to lure people into borrowing money and at exorbitantly high interests. Every lender, at their discretion, carry out one form of credit check or the other.We are not sure about the criterion used for carrying out the background check.Hence,payday loans for bad credit are the norm. The lender most often only needs to evaluate a borrower's current capability of paying back.It is not necessary to knowhow good their credit history is.Other traditional payday loan lenders may only need to check your pay stub.
Payday loan eligibility
Eligibility for payday loans onlineis quite straightforward.The person applying for the loan must be above 18 and must have a steady source of income.This will allow them to avoid defaulting on a payment. Borrowers are not required to tender collateral of any sort.Therefore, there is no risk of you losing a property that means much to you.
The application process for payday loans online
Several financial services offer payday loans online. Your chances of getting approved for a loan depends on a wide range of factors put into consideration. For this reason, we serve as an intermediary between you and the lender.We work with various lenders, help you submit your loan application to many of these lenders.We also ensure that your information is secured and submitted to only licensed financial enterprises.This way, we increase your chances of getting an approval.
To get a loan online, simply use the following guide:
- First, click on the apply now button on our homepage.
- In the window that pops up next, input your zip code and amount of loan.
- In the following window, input the time left for you to spend at your current address and select if you own the place or are on a rent
- In the third step, input your employment details such as company name, starting date and employer phone number
- In the fourth step, input your next payment date, account number, type, and duration to receive your money.
- Finally, input other necessary information and click submit.
Once the application has been submitted, you will have to wait for some minutes, after which you will be notified if your application is granted.
Is your information safe online payday loan?
The lenders we send your loan applications to are Comodo secure, and they have certified financial services auditor (CFSA) certifications.This means that your information is submitted to government-approved enterprises. In case you're unable to pay back your loan before the due date, the CSFA® protects your interest and requires that the lender extends your due date and even with an option to pay in installments. But there is a catch; the interest rate increases, so paying your loan on time isrecommended.
Payday advance loans APR
Traditionally payday loans are known for having an outrageous average percentage rate (APR).Sometimes, the APR can be as high as 400% and, in some cases1300% as well.
For better understanding, an APR is the total amount of money you’re expected to pay in a year when you default on paying when due. How is the APR calculated?APR takes into account the fees and interest paid over a lifetime of a loan.For example, you take a loan of $500for a 90-day term, with $12 fee and $40 interest.We calculate the APR the following ways:
- Add the interest paid and origination fee. $40 + $12= $52
- Divide the total by the amount of loan. $52/ $500 = 0.104
- After that, we divide the result generated by the span of the loan. 0.104/ 90 = 0.00115555556
- Next, we multiply the result by the number of days in a year. 0.00115555556 × 365 = 0.421777779
- Lastly, 0.421777779 × 100% = 42.17%
From the above calculation, the APR on loan mentioned above is 42.17%, which is relatively low. However, this is not the true depiction of payday loans.The APR for some loans can be as high as 1,000%. To curb this exorbitant practices, many states in the U.S. are checking these exercises and ensuring that payday loan APRs are reduced to as low as 40%. That’s why we have ensured thatthe online payday loan lenders we connect you to have reasonable APRs.
Payday loan and credit card: which is better?
A safe online payday loan is the ideal option for individuals who need money quick, giving that unexpected issues may spring up from nowhere. It is more ideal if such person has a bad credit history and thus can’t easily get a credit card funding.
Considering the interest rate, if you’re taking a huge sum of money, a credit card might be better.That’s because credit cards have a 0% interest rate on the first month or within the stipulated grace period. It is after you exceed your credit duration without paying that you start to incur certain interest rates as agreed with your credit card company.However, given that payday loans are usually not a huge sum, it might be the ideal option for you if you need cash instant, provided you’re comfortable with the APR.That’s why Personal Money Network connects you with lenders that have very low APRs.
Where is Payday loan online allowed?
As of January 2020, a total of 12 states in the United States have banned payday loans. Why is that? Many borrowers, when taking a payday loan online, have no proper plan in place to pay back the loans. When this happens, interest rate increases in proportion with the APR, thus leaving them more debts to pay. Some borrowers take more payday loans from other lenders to pay off their debts.This is a temporary solution that leaves them in more debt. In a bid to solve this, several states in the United States carried out exercises to see that interest rates are reduced and that borrowers were given more options for repayment. When this wasn’t solving borrowers' inability to pay back, the following states completely banned any lender or financial services company from giving out payday loans:
- New York
- New Jersey
- North Carolina
- West Virginia
Does this mean you can’t take a payday loan if you reside in any of these states?
The ban lashed out on payday loans in the states mentioned above are strictly against traditional loan outlets. That is, small outlets, offices, etc., are not allowed by the law to operate within these states. However, there are several online payday loans which can be accessed via the lenders' respective websites or mobile apps. We have a network of safe online payday loan companies that we work with. You can apply for a loan, regardless of if you live in the states in which payday loans are banned or not.
Payday loans bad credit
If you have a bad credit history, you don’t have to worry much as your chances of getting approved does not depend solely on your credit history.Different lenders have different evaluation methods to determine if a candidate is eligible for a loan. For this reason, at Personal Money Network, we submit your application to various lenders. In turn, this will give you a chance of getting a loan, even with bad credit.
Frequently asked questions about pay day loans
1. How Do I Get Paid?
At the point of application, you are required to input your bank account number. Once your loan application has been approved, the money will be wired directly to your account.
2. What Collection Method is Used
The collection method varies from one lender to another. Some may require you to head over to their website to make payment. For others, you may need to download the lender’s mobile app and make a payment from there.
3. What Happens When I Don’t Pay On Time?
Not paying loan debt on time incurs additional interest charges according to the stipulated APR. If your loan interest rate is $15, you incur a total of $45 when your payment is due for three months. Eventually, when you don’t pay at all, collection agencies are tasked with having you pay. It is advised always to pay back loans on time to avoid the inconveniences that come with dealing with collection agencies.
Payday Loan online a great way to sort out meager financial issues, especially for people with bad credit. Apply for a payday loan only when you have already tried all the other options, and nothing worked. Also, ensure that you have a stable income source to pay the debt on time.