Payday loans are short term loans that you can use to help pay bills or expenses. The loan is usually repaid in full when you next get paid.
What is a payday loan?
A payday loan is a short-term, small-dollar loan that you can use to cover unexpected expenses or to tide you over until your next paycheck.
You’re likely to hear the term “payday loan” used interchangeably with another similar term: cash advance. It’s also referred to as a check advance or by other names in different states and communities across the country. However it’s called, though, it’s all the same thing: a short-term loan designed for people who need fast cash but don’t want to get into debt for longer than they have to.
They’re not designed for long-term financial planning; they’re meant only as an emergency measure—to help you get through a rough patch without having bad credit consequences later on down the line.
A payday loan is a small-dollar loan that you take out from a lender and repay within two weeks. Typically, the amount of your loan will be between $100 and $500, though it can range as high as $1,000 in some states. The repayment period may vary by state law but is typically set at two weeks or less. You’ll also pay a fee—typically $15 to $20 for every $100 you borrow—as well as interest on top of whatever principal amount you borrowed in the first place.
How much can I borrow with a payday loan?
The amount you’re able to borrow depends on several factors, including your income and expenses. The lender will also look at your credit history when deciding whether or not to approve you for a loan.
If you have a job that pays more than $1,000 per month and have a good payment history with your bank or other lenders, then it is likely that you can get approved for up to $1,000 with no problem! On the other hand, if you don’t have steady employment or any regular source of income (and therefore no proof of ability to repay the debt), then chances are slim that any lender will approve your application.
However, if you are in need of a small loan and your credit history is not an issue, then it’s definitely worth considering. You can apply for a payday loan online or over the phone, without any paperwork needed. All you have to do is fill out an application with your personal information like full name and address.
How do payday loans work?
A payday loan is a small, short-term loan that you can get for up to $1,000. Payday loans are typically due in full by your next payday (hence the name), so you don’t have to worry about making monthly payments like you do with a traditional loan.
Payday lenders provide the money you need and charge interest on it. You may be able to get your money within 24 hours or less (though there are some restrictions). When it comes time to pay back your payday loan, all you need is access to an ATM or bank account—you don’t even have to leave home!
To qualify for a payday loan:
- You must be at least 18 years old; some states allow borrowers younger than 18 years old but under 21 years old if they meet specific requirements; others require those under 21 years old to be co-signers on their parent’s or guardian’s application
- You’ll need proof of income such as recent pay stubs from your employer(s) showing regular income over past 30 days; proof of identity such as copies of valid driver’s license with current address along with Social Security card number
You must be a U.S. citizen or permanent resident You don’t have to put down collateral but you may have to provide a post-dated check for the amount of your loan
How much does a payday loan cost?
- You will be charged a fee for borrowing money. This fee is usually a percentage of the amount borrowed (called an „interest rate“) and it can range from about $10 to $30 per $100 borrowed, depending on the lender and the state where you live.
- If you don’t repay your loan on time, you may also have to pay late fees. These are generally much smaller than the finance charges that come with payday loans but they can add up over time so it’s important to make sure you’re paying off your loan when it’s due.*
You need to be especially careful when taking out payday loans if you have other debts as well because some lenders will take all their fees out at once before paying off any other debts.
This can mean that you end up paying more in fees than you borrowed in the first place.
Repaying a payday loan.
Payday loans are due on your next payday.
You can also repay a payday loan in installments if you need to.
Payday loans can be repaid at any time.
You can repay a payday loan online, by phone and by post.
You can repay your payday loan online by logging in to your account and selecting the Repay option. You will be asked to enter the amount you wish to pay and then select a repayment date.
You can also repay your payday loan over the phone by calling the lender’s customer service line. You will need to provide them with your account number and other details so that they can locate your account.
Pros and cons of payday loans.
Payday loans are convenient and easy to obtain, but they have some downsides. They can be expensive, so it’s a good idea to compare rates before choosing one. They also typically have short repayment periods, which means you’ll need to make your payments on time each month or pay extra fees. This can make it difficult for borrowers who are trying to save up money for large purchases in the future such as cars or homes. Payday loans should be used only as a last resort when you need cash quickly; they’re meant for short-term expenses like unexpected medical bills or car repairs that would otherwise cause financial hardship if not paid soon enough.
If you’re considering a payday loan, be sure to read the fine print before signing any documents. It’s important to know what kind of interest rates and fees you’ll be charged so that you can budget accordingly. You should also find out if there are other options available, such as borrowing from friends or family members or seeking financial help from non-profit organizations like the Salvation Army.
Alternatives to payday loans.
If you need money in a hurry, consider these alternatives to payday loans:
- Borrow from a friend or family member. You may be able to borrow money from someone who knows and trusts you. Typically, they will charge interest on their loan—but it’s better than paying the exorbitant fees charged by payday lenders.
- Apply for a personal loan. If you have good credit and can show that you are able to repay the debt within a reasonable amount of time (usually six months), then applying for a personal loan might be an option for you if there are no other options available! Be sure to read through all terms carefully before signing any paperwork or committing yourself financially as this could help prevent any future problems down the line – especially when dealing with larger amounts of money as they tend not only require repayment but also penalties should those payments fail
Payday loans are high interest, short term loans that are designed to tide you over until your next payday.
Payday loans are high interest, short term loans that are designed to tide you over until your next payday. If you find yourself in a tight spot and need some cash until your next paycheck comes through, you might consider getting a payday loan.
Payday loans can be great for helping people deal with unexpected expenses or even just to make ends meet while they wait for their next paycheck. They’re designed as short term loans, so they shouldn’t be used as long-term solutions. If you find yourself using payday loans on an ongoing basis, then it’s probably time to take a look at your finances and figure out ways to get them under control so that this doesn’t become an ongoing problem for you.
If you’re looking for a payday loan, it’s important to find out exactly how much interest you’ll be charged. Different lenders have different rates, so be sure to compare them before making a final decision. Also, don’t forget that your lender will likely try to get you to take out more than one loan at a time. If they do this without your permission or knowledge and then take the money directly from your checking account or debit card, it could result in overdraft charges that would make the original payday loan even more expensive overall.
While payday loans are a good alternative to bouncing checks or other costly methods of borrowing money, they can also be expensive if used carelessly. Always make sure you have enough money in your account to pay back the loan on time, and do not take out more than one at a time. If you find yourself unable to pay back these loans on time, contact us today for help.