Today one may suffer with different kinds of situations where he or she needs to have some funds urgently for very short period. One of the loan facilities has been created named payday loan, which is a kind of short-term loan that is truly based on the personal checks drawn by the borrowers to be deposited in future or via electronic access to the borrower’s account in the bank.
The borrower in this case has to write a personal check for the amount that has been borrowed by them along with the finance charges for the period. Then they receive cash almost instantly. In few of the cases the borrowers receives and repay the loans by signing on the electronic access to the borrower’s bank.
They keep the check given by the borrowers to the lenders until the next date of pay, where along with the loan amount finance charges must also be paid. Further, the check can be redeemed by the borrowers through payment of cash and deposit the check in the bank. Another option available is the payment of just finance charges and move the payment date to another pay period.
The range for payday loans differs for different states, as per their own legal policies. The average period or the loan terms are two weeks. The cost of loans is approximately four hundred per cent of annual interest or more. The finance charge ranges from $15 to $30 to borrow the amount of $100. The short term have higher APRs than the long-term payday loans.
From the cost point of view these are little expensive than the other kinds of cash loans. One of the basic requirements to have a payday loan is to have a bank account opened in a bank with good financial position and identity. There must be constant flow of income.
With internet payday loans the lenders don’t have to deposit the personal checks. Instead they have to provide their bank information to the lenders so that at the time of repayment borrowed amount could be deposited in the account electronically when the fund is needed and it can be repaid later through electronic withdrawal from the account. This will be an automatic process of payday loans where all the transactions have to be done electronically and there is no involvement of checks, which is more convenient during this internet and technological era.