Payday Loan

Payday loan can be defined as a small short-term loan taken to cover the expenses incurred by borrower until his next payday. As the name suggests, both 'payday advance' and 'paycheck advance' are the same side of the coin for payday loan. Payday loans are also known as 'cash advance' though the name also refers to provision of cash on prearranged credit line, for example, a credit card.

The amount, which is borrowed as a payday loan, ranges from a mere $100 to $500. The loan return period is of two weeks with interest of loan ranging from 390 percent to 780 percent on the basic of Annual Percentage Rate or APR. Although, the rate of interest looks high, but due to the very short term of the loan, the loan becomes cost-effective.

Retail lending Process of paycheck loan

A retail lending process refers to the process of taking a loan amount of $ 100 - $ 500 for tenure of two weeks. The borrower writes a check covering both the principal and the interest fee present at the time of borrowing. On the maturity date, it is expected that the borrower will return the full amount to the lender in person. If he fails to turn up, the lender processes the check from the borrower's bank account for withdrawal.

If the borrower does not have sufficient money in his bank account, the check is bounced. This leads to borrower paying some additional fees as penalty, which rarely happens as the next paycheck of the borrower comes in.

Online lending Process for payday loan

The Internet lending is based on online search, referrals, paid advertisements and e-mail. The borrower needs to fill up an online form to provide some personal information like bank account numbers, employer information and Social Security number. The lender checks the information with the sources and deposits the amount directly to the bank account of the borrower. The information of the loan is sent to the borrower via fax, which includes recent bank statement, signed paperwork and copies of a check.

The online form of loan approval is fast becoming the most popular form of acquiring payday loan. One of the major benefits of online loan versus the traditional form of 'visit office' loan is that the whole process is fast. In case of online loan the chance of the loan amount being deposited in the account of the borrower is within 24 to 48 hours of time.

The borrower in concern does not need to go to the office of his preferred financial institution in person. Just fill up the mandatory form, send some papers if the site requires them, and the loan will be deposited directly to the account.

Certain criteria are there to meet before applying for an online payday loan. Most importantly, you need to be a citizen of the United States of America and above the age of 18. Job requirement is there, where at least 3 to 6 months of work presence is needed. A regular residential place is also a prerequisite.




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