An online payday loan is a loan that is issued on the Internet. For applying for such a loan, you don’t even need to leave your home. Online loans can be issued by microfinance companies (IFCs). At the same time, it is not necessary to visit the IFC office. The maximum loan amount is relatively small issued for a period of no more than 30 days. If you are planning to take out a loan for a larger amount or for a longer period, you should opt for an installment loan.
To get an online loan, it is enough to fill out a form on the website, indicating your mandatory details. Often, the decision to approve the application is made within one hour or even faster. Microcredit companies can also issue online loans. Their borrowers must visit the company office at least once for identification.
What do you need to know about the company when applying for a loan?
First of all, you need to choose a microfinance company and make sure that it is listed in the state register of microfinance organizations. You should carefully read the terms for the provision of microloans and the terms of the agreement on the website. Then you need to fill out an application form posted on the same website, indicating the ID number, bank card or account details.
After reviewing the application, the IFC sends an email about the decision. In case of a positive answer, the email contains a confirmation code that the borrower enters into a special field on the company’s website. And after the code is entered, the IFC transfers money to the specified banking details.
How is the borrowed amount transferred?
The first, traditional, method is to receive it on a bank card or account. In this case, the application must indicate the details of the bank account.
The second way is to get it using e-wallet. Instead of an account, you indicate the details of your e-wallet, to which funds are transferred. Then they will be converted into special payment units used by a specific payment system.
There is another way – to receive the borrowed amount in cash through one of the payment systems, which must also be indicated in the application. The money will be issued to the borrower at the office of the payment system after undergoing personal identification. Thus, this is not an online loan in the full sense of the word.
What is the interest rate for online loans?
Many companies are advertising instant loans at 1-2%. However, they do not mention that this is not an annual interest rate, but a daily one. Moreover: in the contract, this information can be deliberately categorized under different points. It is assumed that online loans are taken on a short term: payday. Its rate is high but due to short term it is much more affordable.
Since the beginning of 2017, amendments to the legislation have come into force, according to which the accrued interest cannot be more than three times the size of the principal debt, the repayment period of which is no more than one year. The calculation does not include forfeit and services provided for a fee. This rule applies when the borrower has not even begun to repay the loan.