Payday Loans

How To Qualify For An Online Paycheck Loan?

An online paycheck loan works similar to the cash advances offered by brick-and-mortar payday loan stores. It is a small amount of loan, usually up to $500 to $1000, which can be borrowed for a short period of time, usually a couple of weeks. Likewise, the interest rates charges on these loans are also very high. Several other finance charges are charged additionally. The basic concept is that you authorize your online lender to debit the funds directly form your checking bank account on the set due date (the next pay day). The qualifying criteria are also very much like the same. But, at the same time, it is also important to note that the risks are also similar.

Checking Bank Account, Citizenship And Age

In order to qualify for an online paycheck loan, you must have a checking bank account in your name. In case of payday loan stores, you may get an option to submit a postdated check with the lender. But, when you deal with an online lender, you are usually asked to authorize them to access your bank account so that they can deduct the money on the due date directly from your account. In the first look, these loans look like unsecured loans, but in reality, your checking bank account is the security. The loan is issued on the basis of this checking bank account. So, if you have this account in your name, you have won half of the battle. The qualify criteria also requires you to be a US citizen and at least 18 years of age. So, basically, anyone who has a decent employment record can easily qualify for these loans.

Why Then Some People Say These Loans Are Risky?

Despite the very fact that almost anyone can easily qualify for an online paycheck loan and that anyone can borrow money almost instantly using this method, you must be wondering why some people call payday lending predatory. Even the Federal Trade Commission has warned consumers against it. Obviously, there’s no smoke without fire. The most unfortunate reality is that payday loan borrowers are getting bankrupt in large numbers. These loans are not just extremely expensive but they have also been designed in a way that often pushes the borrowers into a quagmire of debt, getting out of which turns out to be an impossible task.

Therefore, if you are tempted to borrow an online paycheck loan because of the lucrative features it has to offer, you are advised to put your thinking cap at work. Study the pros and cons of these loans thoroughly before you go ahead and file your application.

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