Payday Loans (Also known as Fast Loans, Online Loans and Fast Loans)
How Online Payday Loans Work
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With an online loan, the loan proceeds are generally deposited directly into the borrower's checking account. Loan payments (and finance charges) are withdrawn electronically from the checking account.
Borrowers can automatically renew or rollover the loan. The lender automatically withdraws finance charges at the end of each loan term.
If there are not sufficient funds in the borrower's account when the lender attempts to take a charge or loan repayment, both the lender and the borrower's bank charge fees.
In addition to high fees, borrowers have the risk that their privacy will be breached and that personal and financial information will be misused. Financial and personal information is transmitted over the internet, often over web links which are not secure. Information lenders usually require includes:
- Social Security Number
- Bank account information
- Employer information
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