If you are strapped for cash and just need a few hundred dollars to make it to your next payday, a payday loan might sound like the financial tool you need. Understanding more about how to get a payday loan and the common repayment options for these loans is the first step in potentially solving your current financial challenge.
Find out more about payday loans below, including how to get a payday loan online. Plus, find out about installment loans, an alternative to traditional payday loans with more flexible terms that might be right for you.
What Do You Need to Qualify for a Payday Loan?
The requirements for payday loan approval vary depending on your lender and what state you’re in. Payday loans are regulated by the states, and each has its own rules. Lenders may also have their own policies, with some asking for more documentation than others.
In general, traditional payday loans don’t require good credit. In fact, most lenders for these loans don’t even check credit. Some common basic requirements for payday loans include:
- A valid and legal form of ID. Your driver’s license will usually suffice, but you may also be able to use another form of state-issued ID or even a passport ID. Check with any potential lender about ID requirements so you know whether you can meet this requirement.
- A qualifying checking or savings account. You need a bank account in good standing that can receive the funds from the loan as a deposit and be used to pay back the loan. Typically, payday loan lenders require you to sign an agreement that allows them to automatically withdraw your funds to make the payment when it comes due.
- Proof of income. Most commonly, payday loan lenders look for paycheck stubs showing your most recent paychecks. This helps them understand how much your next paycheck is likely to be. In some cases, payday lenders might accept other forms of income documentation, including W2 statements or bank statements showing direct deposits from your employer.
- An address. You must have a legal address. Some payday lenders may not allow a PO Box. The reason payday lenders require an address is that you must reside in a state where they can legally issue a loan. Not all lenders can issue loans in all states.
- Phone number. Lenders usually want a way to contact you if there are any issues with the loan or repayment of it. Payday loan lenders typically require a working phone number and may also ask you for an email address or other forms of contact.
How Do You Apply for a Payday Loan?
You apply for a payday loan by gathering all of the required documentation and information listed above and completing an application. If you’re asking, “where can I get a payday loan?,” the easiest answer is often online. You can also find some in-store payday loan locations and apply in person.
Either way, payday loan applications typically only take a few minutes to complete. Online payday loans are even more convenient because you don’t need to get dressed, leave your house or drive anywhere to apply for one. You don’t even have to wait until normal business hours, as you can apply online 24 hours a day. That may help provide some peace of mind if you’re worried about a financial matter late at night and looking for a potential solution before you go to bed.
How to Get Approved for Payday Loans
Payday loans don’t usually require good credit, and, in most cases, the lender won’t even pull your credit report. So you don’t need to worry about your credit score or disputing inaccurate items on your credit report to bring that score up for the purpose of getting a payday loan. However, you do need to meet any requirements set by the lender and local government regulators.
You can find out more about the requirements for a payday loan by researching potential lenders. Look at their sites to find out what might be required for a loan and how they manage loan processes. The application page may also give you some information about what is required to apply for and be approved for a payday loan.
Take care when you’re completing your application. While payday loans may be fairly easy to get approved for in comparison to some other types of credit, a typo or incorrect information on your application can still lead to a no.
Once you complete your payday loan application carefully and submit it, documents are usually processed quickly. You’ll likely know whether you’re approved for a payday loan the same day, and in many cases, may know the status of your application in just minutes.
Payday Loan Repayment Options
Payday loans are repaid in a single lump sum, and the lenders typically don’t leave any more room for risk than they have to. That means the repayment options are automated to some degree, allowing the lender to process the payment even if you take no action yourself on the due date.
One common option is that lenders have you write a check for the total amount to pay back the loan. The payday loan lender holds that check, depositing it on the date that your payment is due. You have to ensure that you have enough money in the account at that time; otherwise, the check is returned for non-sufficient funds. In that case, you still owe the money — and likely additional NSF fees — and the lender might turn the account over to collections. While payday lenders don’t check your credit — and the loan and your payments don’t usually show up on your credit reports — a collections account does get reported and hurts your credit.
The other common payday loan repayment option involves signing an agreement that allows the lender to take the money for the payment directly out of your bank account. The lender is only allowed to take the exact amount you agree to and can’t legally take it before your due date. You’re responsible for ensuring the amount is available on that date. If the money isn’t available, the same NSF and potential collections scenario can occur.
Where Can You Get a Payday Loan?
You can’t get a payday loan in every state. Some states prohibit payday loans; if you live in Arizona, Arkansas, Georgia, New Mexico, North Carolina or the District of Columbia, you won’t be able to get a payday loan. You may be able to seek other options, such as a small personal loan.
If your state does allow payday loans, you can look for lenders online or off. To find in-store lenders in your area, start with Google or ask for referrals from people you trust. You can also search for online payday loan lenders by starting with the search engines. However you look for payday loan lenders, conduct research to find out whether potential lenders are legitimate and responsible.
Some red flags to look for include:
- The lender asking you for money. Legitimate payday loan lenders don’t ask you to pay fees upfront; they take the fees out of your payment.
- Unclear terms. Lenders are required to disclose fees, interest rates and other terms of the loan. If the lender refuses to provide this information in writing or answer questions you have, you might want to consider another lender.
- Problematic communication. If you can’t get someone to call you back or answer your legitimate questions, you may run into communication problems during the short term of your loan.
You may also want to look for a responsible lender. Responsible lenders work to provide loans that meet your needs without putting you in a financially impossible situation.
Payday Loans vs. Installment Loans
The total amount of a payday loan comes due in just two to four weeks. Typically, the total amount ends up being paid out of your next paycheck, which can leave you floundering financially in the near future. But payday loans aren’t the only way you can get fast cash for urgent matters. In some cases, an installment loan might be a better option.
| Payday loan | Installment loan |
| Can only borrow a limited amount — in many states, payday loan amounts are capped at $500 | Amount you can borrow varies by lender and your financial situation, but is often more than it is with payday loans |
| Total amount due in a single lump sum | Payments are broken up into numerous installments, making each payment smaller and easier to deal with |
| Loan must be repaid within two to four weeks | Loan payments can be stretched out over months or even years, depending on the terms of the loan |
| Making your payment on time doesn’t help your credit | If the lender reports timely payments to the credit bureaus, making your payments can help you build a positive payment history |
Responsible Lending From Wise Loan
If you need money for an urgent matter or are looking to build your credit for the future, Wise Loan may be able to help. Find out more about Wise Loan’s responsible lending practices and apply for a loan today.
The recommendations contained in this article are designed for informational purposes only.
Frequently Asked Questions
Can I get an Online Loan with No Credit Check?
The answer is yes Here are 6 ways you can obtain online loans without a credit check:
- CashNetUSA.com – Online payday loans available. No Faxing. You just need to approve and pay.
- LendingClub.com – Online personal loans as low as 1%. No credit checks.
- Prosper.com has an online installment loans available – 0% Intro AP Rate for balance transfers and purchases after 60 days
- AutoTitleLoans.net offers an auto title loan online. Get approved within 24 hours. Receive money within 2 hours.
- LendUp.com enables you to apply online for a bank loan – Receive cash in your account within 24hrs
- BizLineLoan.com provides an online loan for a business line of credit.
Is an Instant Payday loan possible?
The answer to this question is yes, there is such a thing as an instant payday loan, but you must ensure you know all the risks involved.
If you do end up deciding to borrow money from an online lender then we suggest you check out our top tips on how you can find the best deal.
We also compile a list the most popular instant cash loans, and have compared them side to side to help customers choose which option best suits their needs.
Continue reading if you’re interested in the payment terms and charges for each type of loan.
What is a loan for hardship?
A hardship loan is a type of mortgage where you have to prove why you need the money for an unforeseen emergency rather than just saving for it. It could be that you have lost your job or become ill.
This is the type of loan you might need if you don’t meet other requirements.
Statistics
- Cons Up to 8% origination fee (abcactionnews.com)
- Upgrade The company offers a 3 percent cash back on Auto, Health, and Home categories and a 1 percent cash back on the rest. (abcactionnews.com)
- The loans usually can be rolled over for additional finance charges, and many borrowers—as high as 80% of them—end up as repeat customers.89 (investopedia.com)
- Those protections include a cap of 36 percent on the Military Annual Percentage Rate (MAPR) and other limitations on what lenders can charge for payday and other consumer loans. (consumerfinance.gov)
- In California, for example, a payday lender can charge a 14-day APR of 460% for a $100 loan.6 Finance charges on these loans also are a significant factor to consider, as the average fee is $15 per $100 loan.1 (investopedia.com)
External Links
ncsl.org
consumerfinance.gov
How To
Why do we need installment loans?
Installment loans, which are short-term loans, require a minimum monthly payment. They usually last up to one year and provide flexible repayment options. It’s very convenient because it allows you to repay your loan when you want and have the money available.
People who apply for these loans don’t really care about their credit scores and are simply looking to get some cash fast. An installment loan is an excellent option if you don’t qualify for traditional bank financing.
You should carefully consider how much you borrow before applying for an installment loan. It is necessary to have enough capital to cover interest and fees as well as another month’s payments.
When you apply for an installment loan, you will typically get the funds within 24hrs. The application fee for an installment loan is typically $40. This service is usually charged by most lenders, so make sure to shop around until your find the best deal.
Installment loans may be a good option if you have difficulty paying your monthly expenses or are still behind in payments. This type loan is for people who have poor credit scores and face financial hardship.
A installment loan can be a great option if your application has been rejected by traditional banks. Your income, employment history as well your assets and debts are all factors that will be looked at by your lender. If you can show that you have the financial ability to repay the loan amount, your lender will approve the loan. Therefore, you won’t have the ability to pay off your total debt right away. Instead, you will have to pay a portion each month.
With an installment loan, you will be responsible for paying back the entire balance in full before getting a refund. However, most lenders only offer grace periods during which you can delay making payments without incurring late charges.
