Get a payday loan by filling out an online application form or submitting a faxed application, states About.com. Upon application approval, the lender deposits the funds into your checking account and electronically withdraws the finance charge or the loan payment from your bank account every payday. Lenders market their online payday loans through paid ads, online search, emails or referrals.
When you apply for a payday loan online, the lender may require you to fax the application with information such as Social Security numbers, personal and employer information, bank account numbers, and copies of a recent bank statement along with a check and signed paperwork, note Bankrate and About.com. In case you fail to repay the loan when it comes due, the bank and the payday lender impose insufficient fund fees, which accumulate with time.
Online lenders often charge much higher fees, are likely to use harassing and threatening tactics and make unauthorized withdrawals from your bank account, notes CNN Money. The lender may also require you to agree not to file for bankruptcy, not to participate in class action lawsuits and to keep your account open until you repay the loan. You also risk sending Social Security numbers and bank account numbers over the Internet to an unknown lender, advises About.com.