If you are considering applying for a short-term, unsecured personal loan to finish up your holiday shopping, there are online marketplace services available that can connect you to a lender within their network. This negates the need to visit numerous lender websites to find a personal loan–often a payday loan–that fits your budget. While a payday loan can be an alternative if you run low on cash this holiday season, to get the most out of a payday loan and use it responsibly, there are several factors to keep in mind.

What advantages can an online personal loan service offer you?

Generally, the approval process is fast and easy, especially for payday loans. Another key advantage is that you don't have to fill out multiple loan request forms. Besides fast service at all stages, an online personal loan service partners with dozens of lenders, which connects you with more loan opportunities within the network.

You can complete the loan application from the convenience of your home and may hear from a lender within minutes of submitting the form. But make certain to provide your personal information on a secure website by using only websites that link you to the security provider's certification page.

Are you automatically approved for a loan?

Since a marketplace loan service is not the lender, lender underwriting criteria vary. Most lenders in some way verify the information on your loan application. Generally, a lender that responds to your loan request asks to verify your social security number and runs a credit check with your approval. Other lenders may even request that you email or fax copies of bank statements and paycheck stubs to verify your credit worthiness and income.

What happens following loan approval?

If you are approved for a loan, the money could be deposited directly into your checking account as soon as the next day, depending on the lender's funding practices. The amount you can borrow is based on the state where you live and the lender's loan criteria, including your credit history and income. Repayment terms vary according to the lender and may be affected by the laws in your state.

What rates and fees will be added to the cost of your loan?

Fees related to the loan are set by the lender. But the lender with whom you work is required by law to disclose in writing all loan fees and interest rates before you sign the loan agreement accepting the terms of the loan. These vary by lender and should be detailed in the loan agreement.

Laws regulating late payment fees also vary depending on the state in which you reside. Some states limit the amount of late fees a lender can charge. Also, neither a marketplace loan service nor lender are allowed to charge you fees in advance before you are approved for a loan. Any fees related to loan application or processing are taken from the amount of money you borrow.