Online Loans, an alternative to Payday Loans

Background on Payday Loans

Years ago, back in the latter part of the 20th century, when payday loans first burst onto the financial scene, most consumers weren’t quite sure how they actually worked. Some thought that the payday lender was going to actually take the money out of their paycheck. Otherwise, why would it be called a payday loan? But, of course, that’s not how it works at all.

Since your personal check, not your paycheck, is basically used as “collateral” for a PDL, perhaps they should have started the whole business out by calling it a “personal check loan” instead. And, sometimes they are referred to as just that plus many other names. Some call them “deferred deposit loans” while still others call them “loans for people with bad credit” or “quick loans”. In fact, all are correct but the most popular terminology is still payday loans.

So, payday loans soon caught on worldwide and the process was pretty straightforward. Consumers who needed a short-term loan, usually for an emergency situation of one sort or another, would go down to their friendly neighborhood payday loan store. They would take with them their bank statement, checkbook, paycheck stub or other proof of income [like an awards letter from the Social Security Administration], and their I.D. The clerk at the PDL store would make copies of all that paperwork, check with a database like Teletrack to ensure that the consumer didn’t have excessive outstanding or defaulted loans, and the loan was approved.

Then, the lender would usually give their new customer a check, hopefully, written on a nearby bank. Loans were generally issued for a period of two, three or four weeks, depending on the lender and the customer’s pay dates. On the designated due date, the customer could head back down to the loan store to pay in cash, pay just the fee on the loan to extend it, or just have the check presented to their bank for payment.

Online Loans as an Alternative to Payday Loans

OK, so now let’s fast forward to present day where 21st-century technology has taken over everything in the world, including payday loans. Gone are the days where you have to physically go to a PDL store and present all of that paperwork. Now, you can get that much-needed money while hanging out at home in your pajamas. All you need is the Internet and a device like a laptop, tablet, or even a smartphone. You simply log on to your chosen payday lender and apply. Within seconds, everything that used to take a PDL clerk half an hour to accomplish is completed. Yes, in the blink of an eye, you could have an approved loan. The funds will then be deposited to your checking account that night or even sooner in some cases. Many PDL companies now offer same day deposits as well. And, when your loan comes due, they will simply withdraw the funds from your account to pay off the loan on the designated due date or allow you to defer payment by just paying the fee. Really, could it be any more simple?

So, whether you want to call them online loans, payday loans, deferred deposit loans, quick loans, personal check loans, or just loans for people with bad credit, you’ll find that many savvy consumers call them “lifesavers”. That’s because, with very little effort, you can get one online anytime of the day or night and pay only a nominal fee for the convenience. The next time you find yourself in a bind financially due to unforeseen circumstances like household repairs, rising utility bills, a medical, dental or veterinary emergency, or a mechanical issue with your car, just boot up your computer and get an online loan. Remember, you’re always just a keystroke away from the money you need to cover life’s little emergencies.




This post was written by