Why do payday lenders ask for your Internet banking logins? Everything you need to know before you submit your application.
If you've heard anything about payday loans from anywhere except the lenders themselves, that talk is likely to be negative. One area that causes concern is the online nature of the loans and how the application is administered online. How can you be sure that your information is kept secure, especially when it involves handing over your Internet banking details?
This quick guide will take you through why lenders ask for this information, what they do with your Internet banking logins, and how your financial details are kept secure during the process.
Why do lenders need my Internet banking details?
Payday lenders ask for your Internet banking details because it gives them a way to access your statements. This is one way payday lenders are able to process your payday loan application much faster than banks. Instead of you emailing your bank statements from the past three months, you provide your logins and the lender can access them instantly.
Do payday lenders log into my account to view my statements?
No. When you hand over your login details, the payday lender you're applying with will use a third-party company to access read-only copies of your statements. Popular companies that provide this service include Credit Sense and Yodlee. This is done almost instantly and – more importantly – securely. The payday lender will not have access to your account; it will only be able to see the information it needs to approve your application.
Is it safe to give my Internet banking details?
- Payday lenders will not have access to your bank account and neither will the third-party service that facilitates the sending of read-only copies of your bank statements
- Your Internet login details are not stored
- The process is encrypted and secure
Do I have an alternative to sending my login details?
Most lenders will still let you send copies of your statements as PDFs through email to be verified manually. Keep in mind that this process usually lengthens the turnaround time by a few days, so the "quick turnaround time" that is usually the lure of paydays will be lost. However, if you are concerned about handing over your Internet banking logins, find a lender that offers this option.
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