Applying to get a loan can be a lot of work and require a considerable amount of time. If you are applying for a mortgage or if you want to buy a car you can understand why a bank or financial institute would want to go through all the paperwork to make sure you qualify for this type of borrowing. However, for small amounts of money you just need for a week or two, online payday lenders are the perfect option.
The Difference between Online Payday Lenders and Banks
Online payday lenders are not the same as large banks and financial institutions, they are set up to provide small, short term loans to people that just need a bit of help between pay periods. Since they do not lend large amounts of money they do not have the risk of loss that the major banks and credit unions have when lending tens and hundreds of thousands of dollars. Since the loan is small, often as small as $100 up to $1000, you don’t have to provide any type of security, also known as collateral, and your credit score is not considered.
How Do Lenders Make Money?
Online payday lenders do make money off of providing the funds, but, as the borrower you know exactly what you will pay in fees and charges when you take out the loan. Is not like a bank loan where you will be paying a set interest rate over years and years, instead you pay one, simply flat fee when you repay the loan with your next pay check.
There are no hidden fees and no additional fees and charges provided that you pay the loan completely within the terms of the loan. In some states, but not all states, the lender can agree to extend your loan past the original terms. If this happens you will be assessed additional fees at that time.
Online payday lenders are required to follow the laws and regulations established by each state. They are also limited as to the fees they can charge, which is the same type of requirements as larger financial institutions that may offer short term loans. Payday loans are safe, secure and a good option for emergency funding when needed. Online payday lenders are available to accept your application for a short term loan.
