Many people worry about taking out loans... after all, applying
for a loan is an important financial decision that should be
considered carefully before making any decisions. Unfortunately,
a large number of people worry needlessly about some of the less
important aspects of the loan process.
One common worry that individuals have in regards to loans deals
with loan payments and the various options that are available
from different lenders. While not all lenders will allow all
types of loan payments, here are some of the more common options
that are sometimes given to individuals borrowing money from the
lender of their choice.
You should keep in mind that it's important to take the time to
confirm whether or not certain payment options will be available
from your preferred lender before finalizing your loan
application... after all, it's usually too late to find out
after all of the paperwork has been signed and the loan has been
Direct Payments Direct payments are just what the name sounds
like... you take the money for your loan payment to a teller or
cashier at the lender's establishment, or you mail in a payment
to the lender's address. Direct payments are fairly
straightforward, and work just like payments that are made on
any other bill or debt. The most common payment forms are cash,
cheques, and money orders.
While technically a form of direct payment, not all lenders
allow night deposit payments. Some simply do not have a drop box
for the payments to be placed in, whereas others shy away from
night deposits for security issues. A good number of lenders do
allow night deposits, however, especially if the lender deals
with other financial matters as well. Most automatic teller
machines will accept night deposit payments for the bank or
financial institution that owns them.
Automatic payments require little or no interactivity with the
borrower of the loan, as they are set up with the borrower's
chequeing account or other bank account to process the loan
payment automatically on a specified day of the month.
Obviously, it's important that the borrower places the funds for
the loan payment into the account before that day... otherwise
late payment fees may apply in addition to overdraft and
insufficient funds fines from both the bank and the lender.
Especially popular with online lenders, electronic payments
allow individuals to make loan payments from the comfort of
their own home over the internet. These electronic payments are
usually processed just the same as electronic cheques or debit
card purchases, and generally draw funds directly from a
chequeing or savings account. Unlike automatic payments, the
borrower of the loan has to manually begin the transaction
though many lenders who allow electronic payments include
options for setting up automatic electronic payments while
making a payment.
Though they are not as popular today as they once were, wire
transfers are still used by many lenders as an easy way to
receive payments from those they provide loans for. Online
lenders in particular tend to be fond of this option, since it
allows individuals who don't want to use electronic or automatic
payments to still do business with the lender even though the
lender doesn't have a physical office near the borrower. Wire
transfers are generally much faster and more secure than sending
payments by mail, and confirmation of payment receipt can often
be attained after sending the payment.
You may freely reprint this article provided the following
author's biography (including the live URL link) remains intact:
About the author:
John Mussi is the founder of Direct Online Loans who help
homeowners find the best available loans via the www.directonlineloans.
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