In Brief, What Is An Online Payday Loan?
An online payday loan is a unique type of loan that relies on a borrower’s employment status instead of a good credit report. Lenders approve loans based on the borrower’s ability to repay the loan when he receives his next paycheck instead of his credit history.
The only thing the borrower really needs to secure the loan is proof of employment. They are small loans that are intended to be short term. Traditionally, a payday loan, also known as a cash advance or payday advance, was a loan that was repaid on or before the borrower’s next payday but in today’s world, the repayment date can be adjusted to better meet the borrower’s schedule and needs. Sometimes, these could be loans approved on the same day.
Common Characteristics Of Online Payday Loans:
There are a large number of payday loan lenders and all payday loans have commonalities
Short-Term – Payday loans are usually due on or around the borrower’s next payday. This might be in a week or a month but is rarely much longer than that. Unlike an installment loan, which consists of multiple payments, payday loans usually require a single payment.
Unsecured – Borrowers don’t need collateral to take out a payday loan. Collateral is something valuable in the borrower’s possession such as an automobile title that will stand good for the debt in the event the borrower fails to repay the loan so the lender can regain some or all of their money. Unsecured lending is riskier for a lender than secured lending so the amounts loaned are typically lower and have a slightly higher interest rate.
Relatively Smaller – Because they are short-term and unsecured, payday loans are usually for smaller amounts than a secured loan because it is difficult for the lender to recover lost resources. They are designed to help the borrower deal with immediate financial hardships yet small enough to pay back relatively quickly. Typical Criteria For Payday Loan Consumers:
- Be at least 18 years old or older
- Be a permanent United States Citizen
- Have a valid bank account that can receive direct deposits
- Have a verifiable minimum monthly income
Typical Loan Amounts:
Generally, loan amounts will vary between lenders but will typically range from $100 to $1,500. Lenders might even consider larger amounts depending on the borrower’s situation. The determined amount will depend on income and other requirements.
Typical Uses For Payday Loans:
A payday loan online can be used the same as a traditional loan. However, it is important for a potential borrower to keep in mind that these loans are typically for smaller amounts and for shorter periods of time so they are probably best used for unexpected and emergency expenses. Approximately 47.7 million Americans live in poverty each year with average earnings of $44,569.
The average American spends $14, 856 on taxes, $11,970 on housing, $9,477 on additional housing expenses such as fluctuating utility costs and insurances, $5,784 on automobile payments, $2,223 on automobile maintenance and gasoline, $6,759 on food, and $4,290 on health care each year. By simply doing the math it is easy to determine that the average American has a $1,322 deficit in his personal finances each year with absolutely no wiggle room for unexpected expenses or emergencies.
Reasons To Apply For A Loan:
There are several reasons that online payday loans are becoming popular:
- Convenience – Unlike loans from traditional lenders, online cash advances can be applied for and receive without leaving the comfort of home with the least amount of hassle. These payday loans are direct lender loans.
- Bad Credit, No Problem – Traditional lenders base approvals on customer credit ratings but payday loan lenders have more lenient criteria for basing approvals. In fact, no credit check payday loans are possible. People often ask about guaranteed loan approval no credit check if you have bad credit. It is not as easy as just being approved like that. If you have a history of nonpayment you might be rejected but in general, this is only in the worst cases.
- Speed – When requesting payday loans online, customers aren’t made to wait for a letter or phone call of approval because they receive notice of approval or denial almost instantly based on the information that they provide. Customer’s that provide bank account information can have their money deposited as quickly as the same day or next day. This way, they will have their money when they need it most without playing the waiting game. Also, these direct lender only payday loans do not have additional layers of people to go through, hence the entire process is fast and efficient.
- Availability – Traditional brick and mortar lenders have limited business hours that can be difficult for potential customers to work around. Very few people can miss a day of work in order to apply for a loan with these lenders. Not to mention if the potential customer is in a financial crisis waiting for the approval decision can add to the crisis. With an online payday advance, customers can apply 24 hours a day, 7 days a week and there are no bank holidays when it comes to receiving a cash advance online.
- Meeting Urgent Needs – Traditional lenders will want to know why potential borrowers are borrowing money and what the money is going to be used for. Payday lenders understand that hard times fall on good people and that unexpected expenses come up. When people are forced to live paycheck to paycheck there usually isn’t a cushion to fall back on so payday lenders are sensitive to the needs of those people and understand that sometimes urgent needs must be met. Online payday loans aren’t as intrusive as traditional lenders and customers privacy and financial situations are respected.
Key Facts About Online Payday Loans:
- The average online payday loan amount is $375.
- The majority of payday loan borrowers are driven by desperation and/or unrealistic expectations.
- Almost all payday loans are incurred due to personal or family expenses.
- Approximately 12 million people use payday loans each year.
- Approximately 81% of borrowers say they would be forced to cut back on needed items such as food and clothing if it weren’t for payday loans.
- Approximately 69% of first-time borrowers use the loan for reoccurring bills.
- Approximately 41% of borrowers have needed something like a tax refund to pay off a payday loan.
Reasons Borrowers Are Drawn To Online Payday Loans
- Focus on fee
Reasons Borrowers Use A Loan Instead Of A Credit Card:
- 4% of borrowers don’t have a credit card
- 11% of borrowers are making payments on a credit card they haven’t used in the past year
- 38% of borrowers applied for a credit card were turned down or knew
that they would be denied based on their credit history.
- 41% of borrowers have used a credit card in the past year but haven’t maxed the card out.
- 47% of borrowers don’t want a credit card.
- 59% of borrowers have used or maxed out a credit card in the past year.
What are the requirements for an online payday loan?
To be approved for a payday loan a potential borrower must be at least 18 years old, a United States Citizen or at least a legal resident, have valid employment with minimum monthly earnings of $1000 a month, valid email address, valid phone number, and a bank account that is capable of receiving direct deposits. One thing that is rarely required and/or taken into consideration during the approval process for a payday loan is a potential borrower’s credit history. Payday loans are typically unsecured loans that don’t have repayment terms based on a borrower’s history instead repayment terms are based on the borrower’s ability to repay the loan quickly.
Receiving A Loan
Typically online payday lenders deposit the borrowed money into the borrower’s checking account within one business day of being approved. The borrower then has instant access to the deposited funds.
Repaying A Loan
The majority of payday loans reach their maturity on the borrower’s next payday at which time the lender will draft the money from the borrower’s checking account. Though these types of loans are meant for short-term use only, the repayment terms are usually flexible in case the borrower is unable to repay the loan in full on his next payday.
In fact, sometimes the borrower will be given the option to repay the loan in installments or roll it over to the borrowers next payday for an additional fee. If you really get into trouble you might consider payday loan consolidation to reduce monthly fees and interest.
GADCapital is fast, reliable, and hassle-free. We understand that most people live from paycheck to paycheck and that an unexpected expense can happen to anyone. Unfortunately, unexpected expenses are rarely timed just right and often occur between paydays.
However, it is fortunate that in times such as these a person can apply for a short-term loan to get him over the hump until his next payday. Bank loans can take days for approval whereas (800) 961-5909 are more lenient and approval can be surprisingly fast. GAD Capital doesn’t charge a fee to submit a request, gets you a decision quickly, and our lenders deposit the money directly into the borrower’s bank account upon approval.
Unlike other payday loan lenders, GADCapital offers a paperless loan request process. No extra documents are required. The potential borrower simply completes the online request form and receives the cash quickly after completing the process with the lender.
GAD Capital customers have the convenience of two paperless request processes: online via GADCapital or by calling our customer service department at (800) 961-5909.
When a potential borrower chooses to call our customer service department a live operator will assist him with the utmost professionalism and will keep his personal information private and safe. We value our customer’s privacy and have stringent security measures. Either way, the process is quick and easy with approvals sometimes being granted or payments made in as little as an hour.
Online payday lender networks like GAD Capital are quickly replacing traditional bank loans because approval requirements aren’t as stringent and they aren’t as concerned about a credit score. We understand that living paycheck to paycheck can be difficult and everyone despite their credit rating will have emergencies that come up.
When those emergencies come up we are here to help when traditional lending institutions are not because hard times fall on good people and we don’t want those good people to be left out in the cold simply because of a number.
Getting a payday advance is also more convenient than ever before. This is the technological age and anyone with access to a computer and/or internet connection or a phone can easily apply for a payday advance loan without the need to leave the comfort of home. Call (800) 961-5909 to request for a payday loan today.
Unlike traditional brick and mortar lenders, we are available 24/7 and don’t have bank holidays. The following holidays are observed by federal banks and their branches: New Years Day, Martin Luther King, Jr. Day, Presidents Day, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day, and Christmas Day. In addition to the aforementioned holidays, most banks are also closed on Saturday and Sunday. Despite the day of the week, month, or year when our customers are approved they can count on receiving the money they need when they need it. At GadCapital our lenders are flexible and work with our customers and allow them to choose the repayment date for their contracts. If a single payment is more than the customer can financially handle, no problem, our lenders provide customers with the option of repaying their loans through installments.