A payday loan allows consumers to borrow up to $1000, depending
on their state's laws and the consumer's monthly income. Payday
loans are intended to be short-term loans, helping get through a
financial emergency until your next payday. Online payday loan
companies add convenience to the process.
Payday Loan Process
Once you have found a payday loan company, you will need to fill
out an application that includes your contact information and
monthly income. You will also need to work out a repayment plan.
If you use a traditional payday loan store, you will need to
write a postdated check that the lender holds onto. Online
payday loan companies will deduct the payment from your checking
When your application has been submitted and approved, you will
receive your cash advance. A traditional lender will issue you a
check, while online companies wire the funds to your checking
account. Your repayment will be due on your next payday, or you
can extend the loan for longer by paying additional fees.
Payday loan lenders charge fees just like any financing company.
Fees include a process fee and interest. To make comparison
shopping easy, the federal government requires lenders to post
an APR, which includes both fees and interest. This is the rate
you would pay if you kept the loan out for an entire year.
If you compare the APR of a payday loan to a mortgage, you will
see a huge difference. However, payday loans are only intended
to be used for a couple of days, so your actually fees will be
lower. The APR is still a good way to compare payday companies
to find the best deal.
Online Payday Loan Lenders
Online payday loan lenders follow all the same rules as
traditional lenders, but they allow you to apply at any time for
a cash advance. They also transfer your cash electronically, so
you don't have to hassle with checks and trips to the bank.
Some online lenders also offer better deals, especially for
first time borrowers. They may waive fees or offer reduced
rates. It pays to check out several different websites to find
the lowest fees for your cash advance.
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