There are 12 million American adults using a payday loan per year. The statistics show that three-quarters of the adults use a storefront lender to apply for the unsecured loan while one quarter uses online lenders to apply for the payday loan online.
These days, it is easy to get approved for a loan. Since everything is now digital, even applying for a payday loans online has become more accessible for borrowers.
You save time and effort because you can fill up the application and get your cash without leaving the comfort of your home. Everything is done over the internet.
Who is eligible to apply for a payday loan?
A payday loan, also known as the unsecured or short-term loan is a loan given to the qualified individual and paid one time on their next payday. Payday lenders market the loan to people with low income, and those who have denied a loan in the past.
Since most lenders promote their business online with “no credit check,” it appeals to borrowers who are needing instant cash and have a bad credit history. It’s because these lenders don’t care about your credit profile and are looking only at your creditworthiness.
As long as you can pay your loan on time, you are qualified. Of course, there are basic documents that you need to submit before getting approved.
While lenders advertise no credit check, they still perform a soft credit check. They need to see your income and employment status just to ensure that you can pay your loan.
The information that lenders gather from a consumer reporting database like CL Verify, Teletrack, or DataX is not reflected on your credit profile. In short, it doesn’t impact your credit rating.
What are the basic requirements?
One of the most common questions before applying for loans online is the requirements. Upon filling up your application, you also need to upload your documents.
One thing about your online application is that it is faster and easier. You don’t need a lot of documents and go personally to a storefront lender.
Below is a list of documents or requirements that you need to fulfill:
- You must be at least 18 years of age to confirm that you are on the legal age of understanding your financial obligations.
- You need to submit proof of your residency to examine if you’re eligible.
- You need to have an active bank account. It’s where lenders can automatically withdraw payments from your account.
- An active email address and phone number. Since the process is online, a valid email address is needed because they will notify you of email.
How does online loan work?
You can process and get approved of your loan within minutes. You can also your loan the same day or on the next business day, depending on the time of your application.
Most lenders online transfer the loan in your bank account or load it in your prepaid debit card. By receiving it fast, you can address your current financial difficulties at once.
Be mindful that no lender asks for a fee to process your loan. If your lender is asking you for an upfront payment, it’s a red flag that you should watch out.
The payment of your loan is due on your next paycheck. The interest is about 400 percent. Authorizing lenders can give them the freedom to collect the payment from your bank account electronically.
If you fail to pay it on your due date, you can apply for a rollover or renewal of your loan. A rollover applies when you pay only the fees and your loan is extended.
Failure to pay your loan can have great consequences. If you provide a lender an authorization to withdraw from your bank account, and your account is below the loan amount, you would incur added fees and interest from them. Not only that, your bank may charge you for the non-sufficient fund.
You need to be watchful about getting loans online since there are a lot of bogus lenders in the market. You need to spot a real and legit lender that can provide you a loan.
Don’t think that a lender that can give you instant cash is a legit one. Sometimes, they lure borrowers who are in need of immediate financing to get more out of interests and fees.