As a personal online loan comparator, we are the first interested in users knowing the characteristics of these financial products. When we are going to ask for one of them, we should compare their conditions, since these are very important economic decisions.
Not only does the amount of money we have to pay back matter, but we also have to assess, among other issues, the deadline to return it, interest or what requirements are requested. Undoubtedly, there is an evaluation process that we have to carry out before each decision and that will be essential for us to make accurate determinations.
Therefore, as we want clients to have sufficient elements of judgment to choose the payday loan on the Internet that compensates them the most, then we deepen the circumstances that they have to take into account when choosing these banking products online
What are payday loans online?
They are financial products in which, in exchange for the payment of interest, money is made available to the customer that will be returned within a certain period of time. The fact that it is a class of loans in which the personal factor is emphasized implies two fundamental and related aspects.
On the one hand, that these are granted, instead of to organizations (like, mainly, the companies and Public Administrations), to people. On the other hand, these loans are aimed at people, by nature, which means that they have a smaller amount (between 50 and 50,000 dollars) than those that are marketed with companies.
The difference with respect to the loans of all the life is that the procedures related to their management can be carried out by the Internet, which supposes ease to take into account with respect to the conventional ones. Being able to request and process them online represents a noteworthy advantage since it allows us to save money and time, both in obtaining the supporting documents and in their presentation.
Types of payday loans online
As regards the types of these loans that we report in this comparator, four types must be assessed.
It should be noted that the denominations used are very common in the field of the contrast of financial products, but they are not the only ones used in it nor do they have to coincide with those that are commonly used in other similar pages. It is simply those that have been considered most useful on our site so that your readers are guided in the world of payday loans.
In this sense, we have assessed, as the main indicator, the amount of the loan, but it is not the only one we have taken into account. In the following lines we summarize the categories that visitors to our page can compare:
- Loans with Financial Credit Instituions. With an amount of up to 600 dollars for whose loan the possible inclusions in the delinquent lists of the National Association of Financial Credit Establishments (Financial Credit Instituions) will not be taken into account.
- Mini credits Up to 900 dollars of financing.
- Bank loans. Those managed by traditional credit institutions, from which up to 50,000 dollars can be obtained.
- Non-bank loans are financial products processed by the entities of the alternative bank or online banking and their amounts can reach 15,000 dollars.
How to get a payday loan online?
It is as simple as entering the websites of alternative credit institutions that operate on the Internet, whose number has been growing in recent years.
Once these sites are accessed (some of the intermediary entities between lenders and borrowers also perform these services), it is possible to choose the appropriate financial product through the loan simulator. We refer to the amount of money on a loan that is desired and the period of time in which the client agrees to return it, which will generate the fees to be paid for the operation and complete the information on its total cost.
If the bank and personal data to be entered in the loan provider system are suitable, which is a decision that will depend on a computer algorithm, the requested loan will be approved.
Who can get a payday loan online?
These are financial products with a fairly open and wide audience. As we will see in the following section, they are usually characterized by a lower requirement of requirements (except in the case of bank loans, which do have stricter ones). But in the rest of the products, in which the credit institutions manage, they do not have the same presence.
As for the population that can access these financing channels, we must highlight that similar criteria are usually valued in bank loans and those that are not.
Those who manage Internet banking usually open the possibility of obtaining one of these loans to those between 18 and 65 years. On the other hand, in traditional banking, exceptions can be made, depending on the confidence that inspires the client’s credit history, regarding the last age. The age of majority, on the other hand, will function as the criteria to be taken into account to favor access to this financing by the youngest applicants.
Requirements to obtain a payday loan online
As we have commented in the previous section, the requirements to obtain a payday loan, leaving aside the age, previously, at a time when Internet banking did not yet exist, had to do with the ability to repay the borrowed amounts shown. by the entity’s client.
However, the economic crisis of 2008 caused great changes in the Spanish banking sector. As it was subject to a public bailout, in return, its risk departments were demanded more stringent requirements regarding the approval or denial of loans. We must remember that numerous non-payments had been detected in the returns of the quotas of the financial products agreed by the banks with their clients. Above all, we highlight those of mortgage loans.
So, in compliance with the control measures in place, conventional banks began to demand, to approve loans, the presentation of payrolls and guarantees and inspected the files of defaulters that made up organizations.
As many regular clients of the banks could urgently need financing and they could not wait to meet these requirements or they were unable to do so, they opted to look for it in Internet banking entities. These, taking advantage of the growing demand that came in this direction, eliminated the previous requirements when deciding on the loan to be granted.
This circumstance does not mean that they do not ask for solvent guarantees that the money borrowed will be returned. The guarantee that the online banking entities will request is that of regular income. These revenues are, for example, those that are usually given in the field of the self-employed. In addition, the amount may exceed those of payroll, as often happens.
Documentation needed to apply for the loan
Obviously, to lend the money you have to verify the creditworthiness of the person requesting it and the optimal way to do it is to request documents proving the economic capacity of each profile.
This documentation, on the other hand, is usually requested in paper format in traditional banks. Online banking takes advantage of the agility allowed by the network of networks in these procedures since it is possible to attach these documents (for example, scanned) on their platforms. You just have to have registered a user and their corresponding password to use this service.
For its part, conventional banking is increasingly giving customers the possibility to do this paperwork for sending documentation online. But what documents are usually required in these cases?
First, we must confirm the identity of the applicant. Among other things, to verify that your age is between 18 and 65 years. In this regard, the DNI is the most appropriate document. Scan it and attach it or deliver it photocopied are the simple steps by which the delivery of personal documentation is solved.
With regard to bank data, these can be credited through payroll receipts, property documents of the property (maybe from other people) through which the loan is guaranteed or invoices that show income regular.
What are the interests of a payday loan?
The interests of these financial products can be considered as the price of lending a certain amount of money to be returned in a certain period of time. In the simulators of the websites of the payday loan providers, we will be able to see how much it costs, adding the interest, and operation of this type.
In these consumer loans, a nominal interest rate (TIN) is applied, which generally will not vary during the entire repayment term of this financial product. Apart from these fixed interest rates, some variables are also applied to these payday loans, but they are not the usual ones.
On the other hand, when calculating the total cost of these consumer loans, it is important to include in the operation the cost of the combined sale products that are sometimes linked to its concession. We refer, for example, to credit cards or mortgage life insurance. These involve the payment of fees or commissions, such as maintenance fees, which must be added to the disbursements that the payday loan will originate monthly.
Likewise, we must not forget that credit institutions have a certain discretion when establishing the conditions of payday loans that they bring to the market.
In this sense, they will function as mechanisms similar to the risk premium and money loans or debt payments between States. If the client has a reliable rating by the risk department of the lender, lower interest will be imposed.
However, when the risks of non-payment of fees by borrowers are high, credit institutions will choose to raise interest, so that they will be hedged against defaults that may arise in returns.
How do I return money from an online payday loan?
Paying a loan is the part of the client’s commitment to the agreement that the concession of all these financial products implies. The traditional method to make it easier for the customer to return it is to pay in a fractional and prolonged manner over time the total sum of the money he has received.
In this regard, some quotas are established that usually divide the amount to be returned equally. Although we also have to assess that some consumer loans allow differentiating the amounts that will be paid in each installment.
Without going any further, a usual example is to set higher amounts for the first installments, due to the psychological and practical effect of getting rid of significant amounts of returns, and to deal with smaller amounts later in a more relaxed way. The payment of fees.
In fact, a similar formula as that used with the VAT of a home and the money that remains to be paid and that is left for the formalization of the mortgage loan.
Likewise, we must point out that the amount of interest may vary depending on how the payment is shortened or lengthened by means of installments of these payday loans, which will also be an issue that credit institutions will also take into account and that can be verified through operations simulators.
In short, it is worth comparing payday loans online, since we can save money and get more advantageous conditions.