Today, most people prefer not to borrow money from friends or relatives because there is another more effective way to receive the necessary amount of money. In the era of smart technologies, everyone can solve his/her problems with the use of the Internet. Just a couple of minutes and the necessary amount of money will be on your banking account. However, before you make this step, you are recommended to check how payday loans work to know whether you need a loan or you can wait till the payday. When our desires and opportunities do not coincide, we are looking for work that would bring more income. And what if there is enough money, but it is simply not at hand or will come a little later, when it is needed now. This is one of the situations when online loans are useful. Here, you have an opportunity to find answers to all most common questions you may want to ask before you get started with a loan application process online.
What Are the Main Distinctive Features of a Payday Loan Online?
A payday loan is a financial service designed to satisfy a small monetary problem of a client, in time giving him/her the necessary amount for a certain period – without requiring information about income, collateral, and guarantors. It is much easier to get a payday loan on the Internet than in the office: in order to get money, the user needs to create an application on the company’s website, attach a scan of the passport, and specify the bank card details.
A micro loan on a card around the clock means automatic processing of the application in the service independently, at what time of day it was sent. It is possible to obtain a fast loan online almost immediately after the application is approved. But the process of crediting funds to a card account depends on the rules of the bank that issued the card. Unlike financial institutions that issue loans only on documents confirming the client’s solvency, online microloans provide a more accessible type of borrowing money.
How Much Can You Borrow?
It is difficult to answer for sure because each situation is individual. However, you should understand that microfinance organizations give credits for smaller amounts than banks. Specialization of microfinance organizations – loans until the payday. They give $100-$1000 but good news is that you won’t have to waste time on different paperwork.
When Should You Give Preference to a Payday Loan Online?
You can borrow money for interest not only in branches of financial institutions, but also in Internet services of non-bank companies. Online credit is a small short-term loan that can be issued through the site and received remotely on a card. Of course, not all Internet services that operate in your country serve users completely remotely: many have a stage of calls to the client and his family to verify the identity, or a meeting to sign the contract, etc. But it is very rare. Everything you need to do to receive money is to fill out an application on the site and get a loan for 15 minutes on the card. The first loan is reduced to 8-10 minutes, if the user is not distracted from the process. Regular customers of the service generally spend on everything not more than three minutes, because they do not need to fill out a questionnaire.
What are the Most Typical Situations for Getting Money Online?
- Salary is delayed
- Unpredictable purchase, for example the opportunity to buy what you have been waiting for at a considerable discount
- You are in an unforeseen situation, which requires an instant settlement from you, but you do not have the funds with you (you have to pay a fine, repair a car, pay in a restaurant, etc.)
When Should’t You Apply for a Loan?
What cases is an online loan contraindicated?
- When getting a loan for the purchase of real estate or cars
- Receiving the loan amount for an indefinite period (without understanding when there will be funds for repaying the loan)
- Receiving a loan at a higher rate than it can be repaid at a time (from one salary)
From typical cases, we can conclude that online loans should cover the need for funds for a short period with a clear understanding of when a loan can be repaid. If you need to get a loan for a long period, despite all the difficulties, it is better to contact the bank.
How to Apply for a Loan Online?
How to get a payday loan? To get a loan on the Internet, you need to go through several stages:
- Register in the online loan service by completing the application form. It will require information on how you work, how much you receive (including unofficially) and how much you spend, whether you have loans in other institutions, whether there were delinquencies, etc.
- Get service response. Reputable lenders will not keep you waiting long because it processes data from applications not manually, but automatically – instantly. In case of a positive decision, you will need to read the terms of the contract and put in the end a note that you agree to them. The amount you need will be immediately transferred to your card. Usually money is received by payday loan users within five minutes but some banks spend their enrollment longer – up to three working days.
How Expensive are Internet Loans?
Online loans are more risky than bank loans because customers do not need to be officially employed. They need to prepare a certificate of income, they do not need to give pledges and attract guarantors, there is no need to come to the office, etc. All these differences increase the probability of non-return of funds by some borrowers. And in order to reduce the negative consequences from this, higher interest rates are set in online lending services.
But such a service will be useful only to someone who understands that he needs a short-term loan. Online amounts of up to 1000$ are issued for the maximum of 30 days, so such loans do not create a heavy burden on the user’s budget. In addition, they are used only to meet urgent needs when there is no time for bank paperwork; there is no possibility to visit the bank; the bank refuses the money;
it is illogical to apply to a bank – for example, labor payment is late, but a bank loan will be processed longer than the delay itself.
What is the Main Advantage of a Payday Loan Compared to the Traditional Bank Loan?
Now, there is an opportunity to get a loan almost instantly! Why this is possible and how it works: you choose a loan offer online. You do not need to walk anywhere, you need a computer with internet or a smartphone with 3G and in online mode you can choose a suitable company.
Then you go to the company’s website and also online, instantly fill in the necessary data (name, phone number, etc.). The data instantly fall into the automatic scoring system, which assesses the risks and the prospect of a loan repayment. After if the system solution is positive, you can still get an additional call from the company employee, for clarifying details. After a while, you can get money on your bank card almost instantly!
How to Understand that You are Scammed?
There are a lot of credit scammers nowadays, therefore, while you are looking for money, you need to be very careful not to fall for their bait, because, in fact, there are a lot of schemes for deceiving naive and desperate people. Who is the target audience for credit scammers? This is, first of all, those people who cannot, for one reason or another, get a loan in banks or credit organizations. Usually, these are people with bad credit history, heavy credit burden, delinquencies, unofficial income, which they cannot confirm.
How are potential borrowers trapped by credit scammers? Often, if a person has only changed the job, works unofficially, then the bank is likely to deny a consumer loan. The future borrower begins to search for ads on the Internet or places ads that he needs a certain amount for a certain period. Credit scammers, of course, call right away. The first and most dangerous scheme is a scheme with the purchase of a certificate of income. People call and say that they can give out a loan, but for formalities, a certificate of income is needed. You are offered to help to get a certificate. Then, when the paper is supposedly ready, you must pay for it in advance.
Is It Possible to Get an Instant Loan with the Poor Credit Score?
The main factors that change your credit history:
- Uncovered loans in other organizations;
- loans overdue for 5 to 30 days;
If the delay was one and not too long – this is not taken into account. Prepaid loans are also not a positive indicator. Your story is not tainted but the company understands that you are a risky borrower.
One of the important benefits of payday loans is the possibility to borrow money without having a perfect credit history. You can have low credit but this will never prevent you from being approved for a payday loan online if you have a source of steady income.
The Detailed Instruction on Steps You Should Take to Get a Loan
- Sign up. Registration is necessary for the first time. On subsequent visits, you will log in with your username and password.
- Fill in the form. The full questionnaire is also filled only when the loan is first received. For subsequent online loans, your personal data will be stored in the system and you will be able to use them. When completing the questionnaire, you will need a passport, identification code and a bank card for which you will receive a loan. At one stage, the system will ask you to make your photo with an open passport on the first page. You can make a photo using a web camera. If the device does not have a web camera, then the photo is not mandatory for you.
- Enter the card details. The system will ask you to enter the card number to which you want to receive a loan. The system verifies the card through your bank, so only specify your card. The introduction of someone else’s card will be regarded as an attempt to receive money by providing untrue data with the use of electronic computers.
- Get a solution. After completing the questionnaire, the system or informs you of the decision “the loan is agreed / the loan is not agreed”, or, in case of discrepancies in the questionnaire within 3-15 minutes, our manager will contact you by phone.
- Sign an electronic agreement. In the case of a positive decision to grant a loan, you will be asked to accept the electronic contract. Agreeing with the Treaty, you sign it with an electronic signature, which according to the law on electronic commerce has the power of a handwritten signature.
- Get a loan. Immediately after the signing of the contract, the money will be transferred to the bank card indicated in the questionnaire.
Which Consequences Should You Be Aware of in Case of Non-Repayment of a Loan?
Many borrowers are interested in the question: what will happen if you do not pay on the loan? And many are interested in the possibility not to pay on the loan at all, that is, to take a loan and not return it to the bank. Of course, theoretically you can take a loan and not return it. Some people do so. True, it only takes one time: after the first delays in payments your credit history will be greatly spoiled. And this means that you can not see other loans in almost all banks of the country. Therefore, you can not take a loan and do not pay only once.
After you miss the monthly payment for the loan, the lender will contact you. More precisely, the collectors may also help the lender to get money back. The borrower will get calls, sms with reminders that you forgot to make a payment on the loan. Please note that most lenders have penalties for delinquencies, so, most likely, after the first delay to the amount of your debt, you will have to pay the larger amount of money, which is the penalty for delay.
With a high degree of probability, you will be called and not only written to you, but also to your relatives and friends, informing you that you are a malicious defaulter. Some lenders will call you and your family and friends for a year or so, recalling your duty and demanding that you return it. Some lenders- within a month understand that they cannot get the money and they themselves stop worrying the borrower.
What happens next? Do not expect that you will simply be forgotten. Such loans from banks are considered “bad” and they try to get rid of them so as not to spoil their statistics. Therefore, debt is often simply sold to collection agencies. Now the collection agency will try to repay the debt (along with all the interest and penalties) by all the truths and fouls. By this time, the amount of debt can several times exceed the loan amount.
If the collection agency cannot convince you to repay the debt, the consequences depend on the amount of debt and the probability of its return. If the amount is insignificant and you look completely bankrupt in the eyes of collectors, you can be forgotten about you. True, not forever. For example, a year later, collectors can again remind themselves. And if the amount is decent and the collectors believe that you are able to pay it (even when selling a car, an apartment, etc.), then wait for the trial.