As you think about borrowing money for any short term emergency, you are probably thinking where should I get the money from? Which payday loan shop should I go to? Should I step into the payday loan shop at the corner of Market Street that has neon lights flashing day and night, or should I go online to loan a quick $100? These are the questions that were lingering in my mind many years ago when I took my first payday loan.
For your information, I am not here to encourage you to take a payday loan just to tide over this month’s rent or college loan payment. I am here to help you understand what are the alternatives of borrowing money versus stepping into a shop that is visible to anyone. By now, you probably guess that I went online before to get a payday loan. Is that better? I guess in terms of fees and speed, it was better but there are also other pitfalls. I will describe below what it is all about. But like I said in my previous articles and I will say this in all my future articles, do not borrow money from anyone if you can. Reduce or delay your spending first but you know better what is possible or not possible in your own circumstances. I am not here to preach as I was in a similar position before.
So what is an online payday loan? It is an advent of the payday loans over the internet, as simple as that. And in this medium, I can complete an entire loan application online and let the lenders quote me the fees before I decide which loan to take up. I am not limited to that dingy shop at the corner of Market Street, I have access to a large number of online lenders who can offer me a better fee structure and also terms and conditions. And this is where it is important.
1. Lower Fees. When I go online to search for a payday loan, I first find lenders who can go below the fees at the local shop. Online payday lenders have less costs as they have less infrastructure to maintain and hence can give a slightly better fee. You could find lenders who are prepared to offer you only $15 per $100 borrowed.
2. Wider Choices of Lenders. There are so many lenders online that we can be spoilt for choices. But there are people who may argue that these are the predators that are preying on people like us and will start to stack fees after fees on us when we cannot pay up.
That is why we always look for lenders that have been reviewed and trusted by others. By the way, trust is a fragile word in this payday loans industry and we should never fully trust lenders as it is our money they want and it is also their money we want. Ask for information from as many lenders as possible and choose the one that meets your needs.
3. Faster Cash. For online application of payday loans, the application process is open 24 hours. You can fill in the forms online and submit for the lenders approval any time of the day or night. And when we get the approval for the loan, the money is Wired into our deposit account electronically and without us needing to queue at the bank with a crumpled check.
4. Easier Repayment. As we get the cash faster, the lenders also gets our cash faster. But this is also beneficial to us as a borrower as the fees as well as the principle gets deducted automatically when our pay arrives in our bank account; before we get tempted to spend the next dollar. I know that some of you think of this as a disadvantage but it instils discipline in people like us. It helps keep us sane and out of too much trouble. Retail lenders hope that we forget to pay up on time and then they can throw more fees on us. Having an automatic payment help saved me..
5. Save Embarrassment. I am not toe sure of you but when I first took up the payday loan, I was slightly unsure how I can face my parents again should they find out. So I could not bring myself to step into a lender shop. The internet may not protect me if I commit fraud but I am just lending money and I do not need anyone to see me in this state.
Even though i would rather go to an online payday lender any day versus a retail lender, that does not mean that there are no risk in borrowing money online. There are inherent risk when it comes to transacting online, for example we are sending sensitive information about ourselves over the internet such as our bank account information, personal details, credit history and Social Security Numbers (SSN). So it pays to be extra careful when we are transacting online and we ought to always be careful about sending our details online.
One of the ways is to be selective about which online service we choose to send our details over. We can initiate a enquiry with many payday lenders but we should choose to only work with those lenders which are reputable and not fly by night operations. One more thing to remember when you choose a payday lender is to always remember you are borrowing money from them and not the other way around; so please do not fall for scams that requires you to transfer an application fee or any other fees to the lender before they can wired the money to your account. This is especially so if they are asking you to transfer the so called “fees” to a western union account before they can release the loaned funds to your bank account. Scam alert! Be cautious and you will be fine.