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What is a Faxless Payday Loan?
The faxless payday loan is ideal for people who are looking to borrow money on a short-term basis and who are willing to guarantee the loan against their next paycheck. Considering the alternatives such as credit card cash advances and the conventional bank loan, a faxless payday loan is quick, convenient and offers far more competitive rates.
Most lenders do business online. This reduces their overhead costs such as office supplies (e.g. paper, pens used for application forms), and allows them to automate processes such as application assessments. Lenders are able to operate more efficiently, so that the cost savings can be passed on to their customers.
The first step is to fill out the online application form. Many people see this as an advantage, since they do not need to make trips to the bank and wait in line. They can file their application with minimum fuss in the comfort and privacy of their home or office.
This is how information about the borrower is collected. The data gathered is used to assess if the application will be approved or not. With the online payday loan no faxing of documents is required and the application as good as approved, as long as employment and bank account information are easily verified.
In fact, eligibility requirements are quite simple. Borrowers just need to be over 18 years old, employed and have a checking account. A less than perfect credit score is not a problem, since a perfect credit record is a rarity these days and most lenders do not hold innocent bad credit slip ups against their borrowers.
The assessment itself can take anywhere from 30 minutes to a few hours, significantly faster than the process for a conventional bank loan. Any additional information that may be required can be submitted quickly online with minimal effort on the borrowers part. Compared to going back and forth to the bank and waiting in line again this is another advantage of faxless payday loans over conventional bank loans.
Following the approval of the application, funds are transferred to the borrowers checking account within one to three business days. For repeat customers with good standing, it is possible to get the money within the day.
The loan is usually on a fixed interest basis and is payable on the next payday. However, it is possible for the lender and the borrower to work out an arrangement where the term is for a longer period and still on a fixed interest basis. It is in the best interests of both lender and borrower to do this, since it is proof of responsible lending on the lenders part and ensures that the loan is paid on time by the borrower, without putting him or her deeper in debt.
Payday loans
A payday loan is also referred as cash advance in many cases. This term comes into use because of the provided cash on the basis of previously arranged credit line, an example of which is a credit card. But precisely speaking a payday loan is loan that is short termed and aims at covering the expenses of a borrower before the arrival of his or her next payday.
If you take a note then you will observe that the legislation concerned with payday loans are different for different countries and even in large countries there are different rules governing them throughout the country. An example of such a country is U.S.A.
Stringent usury limits are at times imposed by certain jurisdictions. These jurisdictions reduce the limits of nominal annual percentage rates (APR) that can be charged by any payday lenders, but then at the same time there are quite a number of them which hardly has any coercion regarding these lines on the payday lenders.
EAR or effective annual day rate works on the basis of compounding the interest so naturally there is a notable difference between them and the APR. Whether EAR and APR are quoted or not, can provide the basis for useful comparisons.
Marketing of payday loans are also achieved through internet, it can be paid ads, online search and referrals. As a consumer you are expected to fill an application form or he or she may choose to fax an application form which also has the required personal information, and employer information.
The loan will be deposited to the checking account directly and by the next payday of the consumer or borrower the finance charge is withdrawn electronically.
The rules and regulations concerning a lending institution are handled by states individually. At one side the lenders form their own group to empower the practices of payday loans and on the other hand the industry teams up to prohibit and prevent loans that are high costing in order to protect rights of a consumer.
In United States the payday loan system has been legalized in 37 states. However it is still treated as illegal in 15 states due to certain reasons, like improbable feasibility. If payday loans are not banned in certain states, then they are usually imposed as usury limits.
There are quite a number of usury laws that forbid or restrict high interest rates. There have been cases where many payday lenders have overcome such restrictions by forming associations with the national chartered banks. This method of forming association is known as rate exportation, the other name for the same practice is also the “lender/service” model.
Actually usury laws should be implemented so that the payday lenders are not charging an exorbitant amount.