Everything You Need to Know About Payday Loans
In the life of almost every person, a situation is possible when a relatively small amount of money suddenly turns out to be necessary. For example, a young family did not calculate the budget and ran out of money, but new funds arrive only after a few days.
A person may need an urgent purchase of household appliances, for example, a refrigerator, stove, or washing machine. There may be a need to go to a big celebration (wedding, anniversary), but there is no opportunity to buy a gift. It may be necessary to pay for medical assistance. A broken car or laptop may need repair, etc.
Need Money Fast?
All the situations described above are united by the need to urgently find the money. You can contact a bank, but such organizations provide a large amount of loans while demanding not only impeccable credit history but also time for the procedure. You can ask for financial help from relatives or friends.
However, there is no guarantee that they will be able to help in solving your problem. The obvious way out of the situation is to contact reliable lenders and get a payday loan online.
Best Payday Loan Lenders
Online lenders offer payday loans, specializing in relatively small amounts and short terms (up to payday). Especially convenient are the options when such an organization transfers money to the card online.
Read below for brief information about the best lenders. Learn about the features, advantages, and disadvantages of each. The presented information will help you decide which company to choose and whether you should use this type of loan at all or not.
ClearViewLoansis, an online credit union that makes fast deposits to the borrower’s card in case of any emergency. The company provides access to reliable lenders, which makes it credible today.
More than 2 million people have already used its services. The minimum amount of available money is $100, and the maximum is $5,000. The annual percentage rate is quite high and often reaches 400%.
In order to apply for money online and get approved, it is enough to meet several criteria: be of legal age, provide a document confirming your identity, have a steady income, and have a valid credit card for obtaining credit funds.
The main advantages of obtaining credit funds from ClearViewLoans are the following:
- No need to visit the company and spend your own time, as all processes are automated and take place online;
- A large number of trustworthy lenders;
- Minimum list of required documents;
- The decision to issue credit funds is made quickly, and the borrower usually receives the funds within 24 hours after submitting the application;
- There is no practice of bringing guarantors or pledging property;
- The loan is available even for those customers who have a bad credit history.
According to customer reviews, there are no disadvantages to obtaining a personal loan from ClearViewLoans. Therefore, it is profitable and reliable to contact the company for services.
BadCreditLoans is one of the biggest and best financial companies today. On its platform, you can carry out a whole range of financial and settlement operations. The amounts of money available range from $1,000 to $10,000. The annual percentage rate is 390%-450%. In addition, there is an origination fee that varies from 3% to 6%, depending on the loan amount.
In order to apply for money online, first of all, you need to decide on the choice of the right amount. It is also important to check if you meet the lender’s requirements, which include:
- Minimum credit score of 600;
- Minimum credit history (approximately 3 years);
- Minimum monthly income $3,500;
- Maximum debt-to-income ratio 40%.
Advantages of BadCreditLoans compared to other companies offering similar services:
- Issuance of a credit funds in just 15 minutes;
- No hidden fees, insurances, and commissions;
- It is possible to request a debt prolongation if necessary;
- Full early repayment of the debt online is possible, any day without penalties;
- A high percentage rate of approved profiles even for clients with a bad credit history;
- Long credit term – up to 28 days.
The disadvantages of BadCreditLoans include the lack of offline offices for issuing cash. In addition, there are often short-term failures in the program when submitting applications.
Sometimes this also happens during the approval. Fortunately, such failures are temporary and therefore do not adversely affect the quality of services provided.
CashUSA is a fast and convenient service for obtaining all types of personal loans, including payday loans. The requirements of the company to clients are simple and easy, its network is wide and varied, the rates are competitive, and the site is reliable and secure, so all customer information is well protected.
The minimum amount of money available to borrowers is $500. The maximum amount is $10,000. The client’s creditworthiness generally determines how much money can be requested.
When applying to CashUSA for services, you should understand that it is not a direct payday lender. It links reliable lenders with borrowers, allowing them to benefit from mutual cooperation. In this regard, annual interest rates vary considerably and can range from 380% to 780%.
CashUSA’s requirements for borrowers are clear and transparent. To get a cash advance you just need to:
- Be a resident of one of the US states;
- Be 18 years of age or older (depending on the state);
- Have a steady monthly income of at least $1,000;
- Have an active bank account;
- Provide a phone number and email address.
Pros of CashUSA:
- Work in more than 50 US states;
- A large number of trustworthy lenders;
- Fast processing of applications and payments in a matter of minutes;
- Funds for any purpose;
- Providing payday loans to individuals with poor credit scores;
- Receipt of funds to the client’s direct bank account.
Cons of CashUSA:
- Large interest rates;
- Lack of a mobile application;
- A few customer reviews.
This is another company that links borrowers with lenders offering personal payday loans, installment loans, etc. The purposes for which credit money from PersonalLoans can be used are very diverse: purchase of household appliances, payment of taxes, home renovation, payment of medical bills, debt consolidation, etc.
The PersonalLoans minimum is $500, and the maximum is $10,000. The amount of money that can be provided to the borrower directly depends on which lender is chosen, the credit score, as well as a number of other market factors. The annual interest rate varies from 400% to 650%.
Applying for a loan with PersonalLoans is easy. This can be done in just 10-15 minutes. The main thing is to determine in advance the size of the necessary amount and make sure that you meet the requirements of the lender. These requirements typically include reaching the age of majority, having a valid bank account, and providing proof of identity.
The advantages of PersonalLoans are the fast provision of credit funds, direct payments to the card, and the security of customers’ personal information. The disadvantage of PersonalLoans is that it is not a direct payday lender, but a platform that allows creditors and borrowers to find each other for further beneficial cooperation.
What Are Payday Loans?
Payday loans are fast online loans that are provided for a short period of time. To get such a loan, it is enough to reach the age of majority and present a document confirming the identity.
Unlike other types of loans, for example, such as installment loans, payday loans are issued for smaller amounts ($500-$1,000) with shorter repayment periods (usually up to 30 days).
How Do Payday Loans Work?
Payday loans are very easy to get. The scheme of cooperation is built in such a way that you can receive money at any time: day and night, on a weekday, weekend, or holiday. Online lenders work 24 hours a day, 7 days a week. Here’s how it works:
- You enter your data in a special form on the website of the lender’s company;
- Wait for approval;
- You receive money on the card and dispose of it at your discretion.
The conditions for issuing loans in each company are individual. Therefore, before applying for credit money, you need to carefully read the contract and clarify incomprehensible points with a consultant. Many companies are ready to provide much more favorable conditions for new customers – no interest rate, and the opportunity to participate in promotions.
It does not matter what the loan is taken for and for what purposes the borrower plans to spend the money received. The reason is usually not indicated when filing the application. But the most common purposes include buying appliances, home renovations, and medical expenses.
How to Apply for Payday Loans?
As you probably already understood, the requirements of lenders to borrowers are quite simple and transparent. The main conditions are as follows: to be of legal age, live in one of the US states, have no payment delays, and have a valid bank card.
To apply for credit money, you will need a tablet, smartphone, or laptop with Internet access. Just visit the website of the lender company at any necessary time and go through a simple application procedure:
- Choose the necessary term and amount. Using a special form, select the required amount and the number of days for which you are taking credit money. Click the “Apply a loan” button and proceed to the next step;
- Create a personal account. In your personal account, you will be able to continue and repay loans, as well as control the accrual of bonuses. To complete the registration, fill in the fields with your phone number and email address;
- Enter your bank card details. You will need to specify the card number, CVV code, and card validity period;
- Sign an agreement. Like all other procedures, the contract is signed online. You just need to click on the “I accept the terms of the agreement” button. Be sure to learn the terms of the credit agreement before signing;
- Receive money to the specified card number. Once your application is approved, you will receive a direct deposit to your card.
Pros and Cons of Payday Loans
Payday loans have their advantages and disadvantages. The main pros include the following:
- High speed of processing. It usually takes no more than a day from going to the site to complete the application to receiving money on the card. You can make an application in just 10-15 minutes, the rest of the time is needed for approving and transferring money to the card. Reliable lenders do everything so that customers can get money when they need it;
- Simplicity and accessibility. Money is usually issued without income certificates, personal presence, guarantors, and certificates of official employment. However, each creditor has its own requirements;
- Possibility of using any card. Money can be transferred to any bank card, regardless of its type. You can get a loan for payment, pension, credit, or salary cards;
- Ability to receive money anywhere. Due to the fact that your personal presence is not required for processing a loan, you can receive cash on your card anywhere. The entire process takes place online;
- Possibility to get a low-interest rate. Credit funds are usually issued at high-interest rates. However, it is possible to get a low-interest rate if you fully meet the lender’s requirements and have a high credit score;
- Possibility to extend the term. If you don’t have time to repay the money on time, pay for a seven, fifteen, or thirty-day credit extension service and use the money without penalties, interest, or marks on your credit history.
Among the cons, the following should be highlighted:
- The amount to be returned is always larger than the amount that was borrowed. But if you choose a creditor correctly and take advantage of promotional offers, it is easy to reduce the overpayment;
- If you don’t pay on time, you can get fines and penalties.
When deciding whether to take credit money, consider not only the above pros and cons but also your personal financial situation. If you do it right, there will be no problems with the approval of the required amount and payments.
Things to Avoid When Getting Payday Loans
If you want to get cash advance on the most favorable terms, you need to know the things to avoid when getting a payday loan online. Learn more about this below.
Making Late Payments
Any credit involves a clear schedule of payments. The lender expects that the payment on the payday loan will arrive before the specific settlement date. If there is no money in the account, then the creditor company makes a note that the loan is overdue.
If the delay is 1 or 2 days, then most likely the lender will treat this loyally. It happens that a client either receives a salary at the wrong time or simply forgets to make a payment. However, the penalty for this 1 or 2 days will still be charged. You just need to deposit the required amount with a small fine and the conflict will be settled.
It is much worse if the delay on the debt is 2 months or more. In such a situation, for example, you can get because of the loss of work. Such prolonged overdue loans are perceived by the lender very negatively.
Especially if clients do not make contact, and ignore calls and messages demanding to repay the loan. Then lenders begin to take action, which as a result can lead to a deterioration in credit history. So, it is better to avoid making late payments when getting credit money online.
Not Reading the Loan Terms
Important advice to everyone who plans to take out a credit – carefully read the terms of the contract, even if you sign it online. After all, by signing the contract, including using a one-time password, you undertake to fulfill its terms.
Therefore, read the documents carefully. Print and keep a copy of the contract. The document must contain all the terms – the interest rate, possible commissions, and additional payments, as well as fines in case of late payment.
You should not neglect information about the processing of private data. After all, you give your consent to the transfer of information about you to third parties, for example, state authorities or collection companies.
Not Considering Other, Less Expensive Options
Payday loans are easy to get. However, they may not be the best source of funding due to their high cost. Alternatives to these loans may be more profitable and less expensive for the borrower. In addition, other types of loans may have longer repayment periods and simpler requirements (for example, lower credit score, lower monthly salary, etc.).
Therefore, if you need to get money online, it is recommended to consider other less expensive options, which include applying for a loan from family or friends, joining a credit union, using a credit card, etc.
Borrowing from Unlicensed Lenders
When planning to apply for credit, it is necessary to take a responsible approach to the choice of a lender. Since there are a lot of offers on the market, there is a risk of running into scammers and dishonest unlicensed lenders.
Unlicensed creditors are credit organizations that operate illegally, that is, they do not have a license for this type of activity. The danger of cooperation with such firms is as follows:
- The interest rate is usually not regulated, so the total cost of the loan can be unnaturally large;
- Unlicensed lenders can change the terms of the contract without the participation of the borrower;
- Illegal use and transfer of personal data of customers to others;
- Such organizations do not sue debtors but use illegal collectors.
To avoid becoming a victim of unlicensed creditors, you need to be able to recognize them before entering into a contract. Consider their characteristic characteristics:
- No license for lending to the population;
- False information about the legal address of the organization;
- Changing the name of the company and the domain of the site;
- Non-compliance with the terms of credit prescribed in the contract;
- Lots of negative customer reviews.
Getting Trapped in the Debt Cycle
Any payday lending creates a certain risk not only for the lender but also for the borrower. The life situation can change dramatically and it may become simply impossible to fulfill credit obligations.
At the same time, ever-increasing interest and penalties will lead to a constant increase in debt, as a result, the debt cycle will be very difficult to avoid. Here are some helpful tips to help you avoid falling into the debt cycle:
- Before concluding an agreement, study its terms, and find out what additional commissions are available for the loan;
- Plan your repayments correctly;
- Calculate the optimal loan term;
- Be clear about the purpose of the loan.
Payday Loans vs Personal Loans
Many people who need cash advance cannot decide whether they should choose payday loans or personal loans. Review the table below and learn about their similarities and differences.
|Payday Loans||Personal Loans|
|The amount varies from $100 to $10,000||The amount varies from $1,000 to $50,000|
|The term is usually 2 weeks – 1 month||The term is from 3 to 7 years|
|High annual interest rates that often reach 400%||Lower annual interest rates|
|Do not have a significant impact on the credit history, provided that the loan is repaid on time||Allow you to build a good credit history, provided you make timely payments|
|It provides for the full payment of the loan immediately after receiving the paycheck||Involves monthly payments in installments|
Alternatives to Payday Loans
In some cases, it is not beneficial for the user to use a payday loan, but it is better to choose one of its alternatives. Find out below about the most popular payday loan alternatives, the benefits of each, and when it’s the right time to use it.
Use a Credit Card
A credit card can be a good alternative to a payday loan. It is especially useful when you need a small cash advance for current needs, but the upcoming costs do not fit into the family budget. For example, you need to renovate the bathroom, buy a new washing machine to replace a broken one, or purchase a birthday present for your best friend.
A credit card can be issued in just one day. And if you pay off the debt as soon as possible, then there will be no overpayments. Credit cards are in the arsenal of any bank. So, you won’t have any problem getting them.
However, in the conditions of a credit card, such parameters as the rate, monthly commission, monthly fee, and grace period are important. All this data is in the contract, which must be reviewed before signing.
Compared to a payday loan, using a credit card does not involve high-interest rates. But only if the debt is repaid on time. During the grace period (it is approximately 50-60 days after the loan) the cardholder can repay the credit debt without interest.
And although there is still a fee for using funds during this time, it is quite small and usually amounts to 0.01% -0.00001% per annum. After the grace period, rather high interest begins to accrue, which ranges from 27% to 60% per annum.
Apply for a Personal Loan Online
A personal loan is an agreement according to which the lender provides a cash advance to the borrower with an obligation to repay the money taken, as well as previously agreed interest and possible expenses incurred as a result of the transaction.
There are many different reasons for applying for personal credit. However, practice shows that an application is usually made for buying a car, renovating a house, purchasing a computer, getting married, paying for training, etc. That is, the credit is intended to pay for goods and services of moderate cost.
A personal loan has a number of distinctive features from a payday loan. Thus, the available amount varies from $1,000 to $50,000. The repayment period is 3-7 years. Annual interest rates are low.
It has a direct impact on the borrower’s credit score, as all regular and overdue payments are displayed in the credit history. Includes monthly payments in installments.
Consider a Credit Union if You Have Time
A credit union is a non-profit organization founded by individuals, trade unions, or their associations on a cooperative basis to meet the needs of the members of the union in mutual payday lending and provision of financial services at the expense of the combined monetary contributions of the members of the credit union.
It acquires the status of a legal entity from the moment of its registration by the state registrar. It has an independent balance sheet, bank accounts, a seal, and its own symbols.
To use the services of a union, you must become its member. Credit union members co-own the credit union, and the credit union is designed to meet their financial services needs. Therefore, the purposes of the loan can be any.
The terms of taking a loan are as favorable and transparent as possible, and the rates are low. The only downside to getting a loan from a credit union is that it takes time to become a member.
Turn to Family and Friends
This is another alternative that you can use. It assumes that you have relatives or friends who have the necessary amount of money and can lend it to you. This method turns out to be quite profitable since you can agree on low-interest rates or their absence at all. In addition, you can also agree with your family or friends on a repayment period that is convenient for you.
Despite all the advantages, it is not always possible to take a loan from family or friends, since they do not always have a sufficient amount and can lend it. Nevertheless, this method deserves your attention, as it is a good alternative to a payday loan.
Generate Income Quickly
If you urgently need money, but don`t want to use a payday loan, you can try to generate income quickly. Of course, this is not always possible, and in some cases even impossible, however, you can try to make an effort for this.
For example, you can make money doing what you love to do. It can be knitting children’s toys, drawing, paper crafts, etc. Just try to sell the products. You can also find some simple side work like handing out flyers and earn some income from it. In general, there are many options. If you are interested, you will definitely reach the goal.
As for the advantages of using this alternative, it does not provide for any contracts, rates, or repayment periods. Everything is very simple. You earn the money you need and thus solve your pressing financial problems.
Are Payday Loans Easier or Harder to Pay Back?
It is often harder to repay a payday loan than a traditional loan. Firstly, this is due to high annual interest rates. They can reach 400% or more. Secondly, lenders usually do not check in detail the ability of borrowers to repay the debt. As a result, difficulties arise as a person may have a low income, have other loans, etc.
What Is Better: a Personal Loan or a Payday Loan?
Personal loans and payday loans have their own characteristics. Therefore, it is difficult to answer unequivocally which is better. If you want to get a small amount of money for a short period of time, then use payday loans. If you need a large amount of money for a long time, it is better to use personal loans.
Do Payday Loans Require Collateral?
Payday loans are the type of unsecured loans. That is, there is no need to provide any collateral.
Do Payday Loans Check My Bank Account?
Payday lenders check your bank account. This is done to verify that you are eligible.