When you Google the keyword “payday loan online,” you’d be surprised that the worldwide web returns over 2 million search results! This simply demonstrates that the popularity of this type of loan is increasing and that many online providers are swarming the cyberspace.
The Question on Security
However, there are also countless reports stating the possible dangers that online payday loans bring. The strongest and possibly, the noisiest of which is the danger associated with giving out your personal information in the Internet.
Of course, when you apply for a payday loan online, you need to provide information about yourself. Because the same is true for loan applications using hard copy forms, it’s but proper for online transactions to follow suit.
Of course, you do not only provide harmless pieces of information such as your name, address, and contact details. Above anything else, you are also required to give out your Social Security Number, your bank details and other information related to the receipt and transfer of the loaned amount and repayment, respectively.
So, what is your guarantee that the information that you’ve provided to avail of a payday loan online will not be used by ill-mannered individuals? How do you know that hackers won’t be able to take a peek at your bank account or worse, steal money from it?
You don’t. While websites may be striving forever to keep their sites secure, everyday, lost souls and naturally evil individuals have been finding ways to hack everything that’s present in cyberspace. So, if you ask how you know that your personal details will not land in unsafe hands, the answer is: you don’t.
You simply have to trust. Trust that the website of your payday loan online application has exercised high levels of security. Of course, you also need to trust their word for it.
The Question on Ridiculous Finance Charges
At the outset, the prospect of getting a payday loan is so enticing. More so if you don’t have to bank on the physical presence of both parties and you simply have to get a payday loan online.
However, the CFA, or the Consumer Federation of America, reports that interest rates (APR’s) from online payday loans could go as high as 650%! Now, this piece of information is enough to give you a heart attack? Well, here’s more.
A survey from the CFA found out that a payday loan online could cost the borrower at most $30 for every $100 loaned. So outright, you are charged with a whopping 30% interest rate! Further, if you have a loan amount of $500, the payday loan online provider would charge you with $150 for that.
In addition, there are online loan providers that automatically renew your loan. This means that sometimes, without your knowledge, online payday loan organizations withdraw a finance charge from your account every payday. They can do that –though you did not give outright permission—because they have your account number!
Of course, a payday loan online also has its own set of advantages. Where else can you get instant and hassle-free cash than by applying for one? But before you go ahead and sign up for an online loan application form, be sure that you’ve checked all angles of your decision. If you’re uncertain, you can always consult your friends, or a couple of financial experts regarding the matter.
~~~ Brendan Heins