Introduction to payday loan lender
A payday loan lender lends fast cash without requiring the borrower to apply for the loan in person produce financial records or collateral and sends the money to the borrower almost always on the same day the borrower applies for the loan. This lender also goes by the names paycheck lender same day lender and emergency lender among other names because most people seek their loans when in need in of urgent cash to sort out their emergencies. Payday lenders operate virtual offices; meaning they may not have a physical office but have websites. Their websites contain information such as their business name lending limits interest rates interest rate calculator and and an application form. They lend fast unsecured cash but charge higher interest rates than most lenders.
Application for loans
A pay day lender aims at making all processes easy and fast so that the borrower spends little time applying for the loan and gets the money fast. To make this effective the lender has a web application form that allows borrowers to place their loan application online. This form requires the borrower fill out a few details inclusive of name physical address (to proof his/ her residence) telephone number the amount of money he/ she wants and his/ her bank account number. The bank account number acts as the destination of the borrowed money once the lender approves the loan. The form does not need to be downloaded as the borrower submits it online.
Regular lending almost always involves the presence of collateral or loan security. No payday loan lender asks for loan security as this would employ the tedious process of verifying this collateral. To save time and make their loans available to a larger clientele payday lenders eliminate the need for collateral. This might explain why their fees are on the higher side; the risk they take must be covered. Some good information can be found in this site.
Lenders of payday loans in comparison to other lenders charge very high interest rates. This owes to the fact that the loans they give are short term (lasting a few weeks to several months) and the annual percentage rate (APR) on their loans must be high enough to cater for their services. Besides the high APR almost neutralizes the high risk they take of lending money to strangers. The high interest also caters for the highly speedy processes involved in ensuring that borrowers get the money they need as soon as possible.
Processing of payday loans
Pay day lenders process their loans fast. This is because they receive all the required information submitted by borrowers almost immediately the borrower sends and they do not require the borrower to submit additional information in person mail or fax; which would take long to arrive. The Absence of credit checks to verify the borrower’s credibility also enhances the fast loan processing. Once the lender assesses the submitted information he/she approves almost instantly.
Disbursing the money
A lender of pay day loans deposits the approved loan money in the bank account of the borrower. This contrasts to traditional lenders writing borrowers cheques or requesting them to go pick their cash/ cheques in person. Wiring the money directly into the borrowers bank account saves time and other costs; making the process cheaper and faster to both parties. https://www.paydaynow.net/
A payday loan lender differs from other lenders because he/ she carries out his/her lending exclusively online or via telephone. He/she lends short term loans that need no collateral to secure and no credit checks to ascertain the loan worthiness of the borrower. Payday lenders charge high interest rates; partly because they take high risks of lending fast money without a 100 % guarantee that the borrower will pay and partly because the short term nature of the payday loan may not attract reasonable APR to cater for all their trouble. Most people seek the services of a payday lender if and when faced with financial emergencies.