Among the myriad of industries that the world wide web has revolutionized is that of the payday loan. Recent years have witnessed the expansion of storefront payday cash outlets into cyberspace, with internet payday loan providers experiencing steady growth and with no sign of slowing down. Demand for the online payday advance, which is marketed online through pop-up ads and websites, is booming and has generated as much as $2.8 billion in revenue.
Online payday loan companies enable borrowers to access emergency cash 24/7. The requirements are easy to meet: Applicants must be at least 18 years of age, and they must furnish an email address, proof of income, and account information. The entire application is completed and submitted online. Upon approval, the requested funds are wired to the customer's personal bank account. On the due date, the finance fee is automatically debited from the borrower's checking account. A good number of online payday cash advance loans are set up for automatic renewal each payday.
The Consumer Federation of America's recent survey of 100 online fast payday loan providers reported the availability of loans in the range of $200 to $2,500, the average being in the amount of $500. Finance fees per $100 loaned were in the range of $10 to $30. The most common interest rate per $100 borrowed was $25, which translates into an annual percentage rate (APR) of 650% if the payday advance is paid off in two weeks.
The internet payday cash advance is a viable option offering numerous benefits to prospective borrowers, including the following:
1. Convenience
The online payday loan offers easy access to consumers in need of fast cash until their next payday. Instead of driving to a brick and mortar payday advance shop and waiting in line, they can simply log online and access the funds with the click of a mouse. Secondly, individuals faced with a sudden eventuality can request the payday cash out of state and anywhere around the world, thus gaining immediate access to the funds. Consumers are also not required to fax any documents to the online payday lender since the entire transaction may be performed over the internet.
2. Speed
Verification and approval of an online emergency payday loan takes place in a matter of minutes. Through electronic transfer, loan proceeds are immediately deposited in the applicant's account.
3. Privacy
Another advantage derived from applying for payday cash online is the privacy associated with an internet transaction. Cash-strapped individuals desiring anonymity can avoid walking into a storefront and find comfort in the confidential and face-saving aspect of an internet payday loan.
4. Security
Consumers can expect secure online applications from legitimate internet payday loan providers. Nevertheless, they should not omit to read the privacy and security policy of any internet payday loan company with which they choose to transact business. To avoid becoming a victim of identity theft, prospective borrowers should confirm the website's security prior to submitting an online application. Two key indicators of a secure server and a reputable company are 1) the lock and key symbol or Security VERISIGN which ensures that the customer's data is encrypted and 2) the 'https' in the search engine, in which the 's' signifies 'security'.
Payday cash loan consumers should be wary of deceptive schemes and screen lenders for trustworthiness. The Community Financial Services Association of America (CFSA), the national organization representing payday advance loan companies recently released an Internet Lending Best Practice requiring its members to comply with state laws covering payday advance loans and to be licensed in the states where they conduct business. Another best practice promulgated by the CFSA is the requirement that members inform prospective borrowers of the intended use of the personal loan service by placing a "customer notice" on all promotional material, including online advertising.