According to the results of the conducted research, almost every second inhabitant of the USA borrowed money by trying online payday loans. It’s good if you have relatives or friends as you can always deal with them. But what if you need money right now but there is no opportunity to borrow right now? Some apply for payday loans in banks but it can take up to two weeks for the application to be processed. When there are a few days left until the paycheck and there is not enough money, you can apply for online payday loans in an MFO. This is a financial service that is quite popular among the population. It helps to quickly solve an arising problem with money thanks to online payday loans.
You need to understand that online payday loans are issued for a limited time. In most cases, for one or several months. The amount you can get will be relatively small. You need to use the service only as a last resort when online payday loans are needed urgently and there are no other options at a certain moment. Still, even in this case, one should not rush to take online payday loans. It is better to carefully study the available offers in order to choose the best option for online payday loans that suit you personally for all your requirements.
The first thing recommended is to pay attention to when choosing online payday loans is the number of commissions and additional fees. There will be an overpayment for online payday loans anyway. The question is how much you have to overpay for online payday loans. This parameter largely depends on the interest rate for online payday loans, take loans from MoneyZap for example. In most cases, the commission is charged to the client on a daily basis. Once you have decided on the exact amount of the loan, you can easily calculate the daily interest. Some MFIs immediately indicate what percentage per day will be charged for the use of borrowed funds.
Do not be afraid of large numbers like 500-600% per annum. This is fine since you are not borrowing online payday loans for a year. The overpayment in this case will be proportional to the number of days during which you use the money. Often the overpayment amounts to several hundred dollars which is quite acceptable. Many companies post an online calculator on the site through which you can calculate how much money will have to pay after a certain number of days. Some financial institutions offer preferential terms for regular customers, provide the first day of free use of online payday loans, etc. Therefore, you should not rush to choose an MFI to receive online payday loans.
Issuance speed is an equally important criterion for choosing online payday loans. For many clients, this is the main indicator. Experienced companies understand this factor and issue microloans in 15-20 minutes. But do not rush to blindly trust the first MFI that comes across: the financial market is attractive to fraudsters. In order not to become a victim of scammers, take the trouble to study the reviews of real borrowers first. Do not trust advertising: some companies indicate that they issue online payday loans in 20 minutes. In fact, it can take several hours to process an application.
To get online payday loans, a client must meet a number of requirements. They may differ for each company. Often, the following requirements are imposed on the user:
- Age from 18 years old;
- Official US citizenship;
- Having a passport.
There are noticeably fewer requirements in MFOs than in the case of contacting a banking organization. People with bad credit history can get online payday loans. This is convenient because with the help of this money it can be improved. In most cases, guarantors and collateral are also not required.
First of all, the interest rate of loans before the paycheck is much higher. Regular loans are issued by banks and microloans by microfinance organizations. These institutions have different statuses and are governed by different laws. The requirements for banks are much stricter as their activities are licensed. In this regard, banks are more careful in choosing which person to issue a loan to. Any bank requires proof of income and study credit history thoroughly. MFOs, on the other hand, provide loans more preferably including to those who will definitely be denied in banks.
The risk that the money will not return to the organization on time is high but it is compensated for by huge percentages. In addition, it is even beneficial for microfinance organizations that the client is late in payments. Microfinance organizations can operate without a license. They are allowed to have a smaller authorized capital. They cannot attract deposits from the population according to the traditional scenario and carry out most of the financial transactions that are allowed to banks. If the money is not returned, the debtor will be called, then threatened by the court and collectors. Citizens often overpay and give back the latter including through on-lending which is extremely unprofitable.
The total cost of a payday loan is determined on the day of the conclusion of the contract. It is based on how much the borrower will spend on it taking into account the associated costs in the form of insurance and the like. Bank data, like any averaged values, show only an approximate picture. But even so, the difference in terms of loans is obvious.
In general, microcredit idea is not so bad. This is the way out for those who urgently need money and who are ready to quickly return it. For example, you need expensive medicine and your salary is only after two days. You take a microloan and return it the day after tomorrow the overpayment even with high-interest rates which turn out to be moderate.