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 approved.
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.Night Deposits
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
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.Electronic Payments
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.Wire Transfers
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.John Mussi
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