Direct deposit loans are suitable for borrowers who have experienced prior financial disruptions. This lending option is generally deposited into the bank account of the consumer within the same or the next business day. Hence, it’s a convenient option for occasions when you urgently require additional funds.
On the other hand, this debt product has some downsides such as high-interest rates. In this article, we are going to talk about the process of getting a direct deposit loan and when you need this option.
The Basics of Direct Deposit Loan
What is a direct deposit loan? This is a type of lending option that is similar to a payday loan. It is suitable for consumers who need supplemental funds straight away. Poor credit holders can benefit from this lending tool.
If you have experienced financial issues in the past and failed to repay the debt on time which led to a low credit rating, you will be able to qualify for a direct deposit loan with any credit. Such a debt product doesn’t require a credit check.
As long as you are over 18 years old (21 in some states) and have a regular income source, you can qualify. Besides, this is a type of payday loan so you need to live in a state that allows payment lending. You can obtain 1 hour direct deposit loans in minutes today even from the comfort of your home. The process is digital and streamlined to allow more consumers to reach convenient lending products and solve their urgent financial problems.
On the downside, you will face higher interest rates for getting quick funding. The interest rates can be up to 400 percent. The repayment term is rather short as the borrower needs to pay the whole sum off within two weeks or by the next salary day. More than that, traditional personal loans allow you to receive a larger sum for your needs while a direct deposit loan is preferable for covering small expenses.
Options to Get a Direct Deposit Loan
With direct deposit, the general public, government agencies, and business institutions can collect and pay money electronically, without having to utilize paper checks, states Bureau of Fiscal Service. Electronic funds transfer (EFT) or direct deposit is a secure, safe, efficient, and cheaper option compared to paper check payments and collections. Keep in mind that all federal benefit payments must now be paid electronically.
So, if you get federal benefits, such as Veterans’ benefits, Social Security, civil service retirement, Supplemental Security Income (SSI), railroad retirement payments, or military federal retirement, you must get your benefits by direct deposit (EFT). You may visit the FDIC website to get additional information on how to open an account online or at a local bank branch if you don’t have one.
How to Receive Direct Deposit
Are you willing to get funded without delay? If your credit history is limited and your rating is less-than-perfect, you may not qualify for traditional loans from the banks or credit unions. Instead, getting a quick direct deposit may be a reasonable solution that will also save your time offering you the needed funding and ability to cover immediate cash needs.
Many consumers use this option when they can’t wait till their credit is boosted. This is what you should do to set up a direct deposit at any lending institution.
#1 Obtain a Direct Deposit Form from Your Recruiter
You should request an online or written direct deposit form from your employer. If your recruiter can’t provide it, you may ask for one from your local credit union or bank. You may easily find forms from different banks and credit unions on the web.
In case you get Social Security or other federal benefits, you will be legally obliged to obtain them through direct deposit of a Direct Express prepaid debit card. In order to sign up, you can call (800) 333-1795 or visit GoDirect.gov.
#2 Fill in Account Data
The following personal and bank information will be needed during the application:
- Bank’s routing number. This is the nine-digit number or ABA number. It is printed on your bank statement as well as along the bottom left of your checks.
- Bank’s mailing address. Your financial institution’s website or bank statement will tell you this information. In case you utilize your bank’s direct deposit form, you will most likely need your recruiter’s address.
- Your account number. You should mention your account number at the bottom of your check. This information may also be found on your bank statement or deposit slip.
- Type of account. This is your savings or checking account. This is where your direct deposit will go.
- Other data. Some direct deposit forms will also ask for the client’s Social Security number or mailing address.
#3 Confirm the Deposit Sum
A borrower may decide to deposit 100% of the check into their checking account. However, it’s more suitable to split the direct deposit into two or more accounts. You may put a part into your savings account, or put a portion into a checking account. Putting the funds into a high-yield savings account will help you save automatically every month.
#4 Attach a Voided Check or Deposit Slip
Some recruiters utilize a deposit ticket or voided check to verify the account and routing numbers. In case they ask you to do this, you should write “VOID” across the front of a blank check. It will ensure the checks’ are unusable if it’s stolen or lost. After that, you should attach the slip or check to the direct deposit form.
#5 Submit the Form
Once you’ve conducted the first four steps, you need to give the form to your recruiter. Wait for the direct deposit to go into effect. This process may take several days or even weeks depending on the institution. If you request a direct deposit loan online, this process will be much faster and the money can be issued within one day.
The Bottom Line
Summing up, a direct deposit loan is a suitable alternative to traditional personal loans and other lending options. This is also a convenient service that gives your safer and faster access to your hard-earned funds than a check.
If a borrower has a less-than-stellar credit score but can’t wait to improve the rating and requires supplemental funds right away, getting a direct deposit loan makes sense. Otherwise, you may search for alternative options with lower interest rates.