Payday loans, so popular among many to fill in temporary shortages in their budget, are now getting way easier to get than before. Originally they were only granted by local check cashing places and cash advance lenders. A borrower needed to visit a lender in person and fill out an application in order to get considered for a payday loan. Some documentation was required to be shown as a part of application process to include recent paystubs and bank statements. Upon approval, a postdated check was given to the lender to include the original loan amount and all of the interest charges and origination fees. Upon receipt of the check by a lender, an agreed sum of cash was given to the borrower. While the whole process was pretty straightforward, it did involve some legwork and time.Banking Technology Makes Things EasierInformation technology has changed it all. Banking got more sophisticated, so did payday lending. With electronic solutions and fund transfers these days it is possible to complete the entire process of applying for a loan, getting funds into a bank account, and repaying the loan proceeds without stepping outside your front door. Most lenders process applications online with electronic verification of banking information of the borrower. Upon application approval, the funds are transferred to the bank account of the borrower. The borrower, in exchange for the funds received, issues the lender electronic authorization to withdraw the loan repayment from his or her bank account on the due date. With user-friendliness of electronic banking solutions today, getting a payday loan is a simple matter of having internet access and a checking account.Lenders Rely On Banks When Granting Loan ApprovalsWhy a lender would approve my application without verifying my income, one may ask. Well the answer is pretty simple: lenders rely on banks to perform background checks for them. This may surprise many, but banks do perform background checks on the applicants for checking accounts, to include a credit check and a banking history check. While the qualification criteria for opening a checking account is rather basic, being less stringent when compared to opening a credit card account or a loan, there are certain standards a customer should meet in order to have a checking account opened. A customer should not have bounced checks in the past that were forwarded to collections as well as any extensive overdrafts with other banks.Checking Account Is the Only Thing You Need to Get Qualified for a Payday LoanThis is what serves as an assurance to lenders that their loan would be repaid. As banks would decline applicants with previous history of bounced checks and extensive overdrafts, as well as terminate accounts that have negative balances, lenders have some guarantee that if a borrower has a checking account in good standing the chance of default is minimal. Another important factor is that lenders know that should you have had an account opened with a bank for some time, you may be allowed to overdraft. That is why lenders are comfortable with granting small loans for a short period of time, usually not exceeding two weeks.
Checking Account, Payday Loan, Bank Account
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ABOUT THE AUTHOR
Amanda Hash is a Bad Credit Personal Loans Consultant with more than twenty years of experience. For more information about Military Loans Fast, Credit Cards, Unsecured Loans, Fresh Start Loans, Debt Consolidation, Student Loans and others please visit http://www.yourloanservices.com
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