Payday Loans and Online Payments

Like most other businesses, online storefronts have largely displaced brick and mortar establishments for payday loan services. These services are able to offer their products faster and more efficiently online and the movement of most organizations toward electronic file keeping has had the effect of eliminating the need to rely on faxed and hand filled-out forms.

Payday loan providers generally allow their clients to receive their loan via a direct deposit into the borrower's bank account. This allows the clients to put the funds to use as soon as their bank makes them available, making the affair of having to make a deposit of a cash, check, or money order unnecessary to receive the loan. This also provides a service in that, the sooner a financial institution receives the deposit, the sooner those funds will become available for use. While it may have taken a day for a check to clear or at least the time involved in getting to the bank before a cash deposit was available, funds are now only limited by the policies of the financial institution into which they're deposited. For those that make use of the various online payment methods available today, this can be very convenient.

Online payments are usually made in one of two ways: most commonly, they are made via a credit or debit card on the service provider's site; sometimes, individuals pay their bills via direct withdrawals from their bank account which are made on a recurring basis. In the former case, of course, the funds can simply be used via one's debit card to make an online payment. In the latter case, directly depositing the funds into the borrower's bank account can sometimes save a lot of hassle and, more often than not, a lot of expense.

Having a payday loan deposited directly in a bank account a couple of days before a bill is due to be deducted from the account can help borrowers avoid over drafting against their account. More often than not, an overdraft incurs high fees, oftentimes much more than the amount actually overdrawn, and can be hugely burdensome. While banks offer these high-cost overdraft coverage products as a "convenience" for their customers—and oftentimes this service is one from which customers have no way of opting out—the fees really pay for nothing and the bank simply collects the penalty. Oftentimes, the consumer would have much preferred that the charge simply had been declined and they had been spared the additional expense.

A payday loan taken in time to cover such impending overdrafts can make online payments as convenient, and hassle-free, as they were intended to be.