Basically, these loans can be divided in two categories: the short term loan and the instant personal loan. The main difference between them is represented by the length of the repayment period. While the loans in the first category are granted for periods from 1 week to 14 days, those in the second category are granted for periods varying from 2 weeks to 30 days.
Another significant difference between the two is the amount of money that can be borrowed. Usually, you can receive more money if you apply for an instant loan than if you apply for a short term one.
When you apply for a bank loan, you usually have to bring in something valuable as collateral, such as a car or even a house, in order to secure the credit. However, you do not have to present any guarantees when you apply for online loans. Your next paycheck is the only collateral you offer to your lender.
How to Get Instant Cash?
The application procedure is very simple and, above all, it takes a short time to complete. This is mainly because the paperwork is reduced to minimum and the information required is only basic.
In order to become eligible, you must be at least 18 years of age and a citizen or permanent resident of the US. Also, you have to demonstrate that you have a permanent source of income, consistent enough to enable you to repay the loan.
Some online loans providers ask you to submit a proof of employment, showing the period since you have been working at your current job, but most of them only ask for a phone number and specific information about the employer and confirm your employment status by phone.
Given the shallow and fast procedure of granting easy payday loans, the lenders are exposed to considerable risks. Their need to verify your employment status is, therefore, understandable, and so is their tendency to apply higher interest rates.
A wide spread misconception about online credits is that they are instantly granted, the pre-approval stage being completely eliminated. This step exists, the only difference between bank-granted credits and those you obtain online being the duration of the procedure. In the latter case, everything lasts a lot less, because it does not involve extensive verifications or faxing.
What to Consider When Searching for Online Loans?
When it comes to getting quick payday loans, throwing at the first offer you see is not the wisest thing to do. You must carefully analyze the repayment conditions and the costs of the credit. Only by making an extensive comparison you can choose the loan that suits your needs and repayment possibilities.
The fee charged by the lender for the provided services or the interest rate is very important, because it adds to the sum you have to pay back. Usually, its quantum is of about 25%-30% from the borrowed amount, but, if you search carefully, you should be able to find online loans at lower prices.
Indeed, payday loans and all short term credits have sensibly higher interest rates than the classic, bank-granted personal loans. This is partly justified by the higher risks these loans pose for the lender due to the fact that fewer verifications are made and the eligibility requirements are much easier to meet and more flexible.
From this point of view, you must carefully calculate your household budget before you apply for one of the many existing varieties of online loans. Asking for more money than you actually need is a way for you to fall into a debt trap, especially if you fail to repay the whole amount you owe within the stipulated period.
However, a short term credit, no matter its specifics, is a financial instrument designed to help you when an emergency situation appears and you have no one and nowhere to turn to. The easy to meet, minimal requirements and the rapidity with which the needed money is granted are the main characteristics that recommend quick payday loans as the right solutions for urgent financial difficulties.