The Ultimate Guide To Payday Loans

While thousands of people use payday loans every month, not many of them actually understand what they’re getting into. This section of Fast Cash Authority will go over everything that you need to know, from choosing a lender all the way to paying it back, so that you’re able to make an educated decision on your loan and stay out of trouble.

I firmly believe that the reason that people get into trouble with payday loans is that they didn’t have all of this information before they applied. If I’m able to help a single person get a loan successfully and safely, I consider this section a success. Payday loan lenders don’t exactly make this info easy to figure out, but I’ve been doing this for a while now and have a good grip on how it all actually works. I know you need money fast, but what’s in these articles can save you a ton of time and stress that would come from being unprepared.

You can use the links above to navigate, or just scroll down.

So What Is A Payday Loan?

A payday loan is a small, short term loan that is designed to provide cash until your next payday. On your next payday the loan is supposed to be repaid in full. The lenders will not check your credit, instead they are looking at how long you’ve been at your job, your checking account, and how much you make each month.

Is It Safe?

Yeah, payday loans are safe as long as you borrow from a legit lender and understand what you’re really getting in to. What really screws people up is that they borrow too much money, and then the day that it’s repaid they end up just as broke as they were when they accepted the loan.

In order to prevent this you either have to borrow as little as possible, or do everything in your power to make some extra cash before it’s time to pay the loan back. Adding a little cushion to your checking account before paying the loan back can go a long way.

How Much Can You Borrow?

The amount that you’re able to borrow depends on a few factors. The most important is how much you make each month at your job. They’re going to look at how much your income is before things like taxes and insurance have been taken out. This is probably called “gross earnings” on your pay stub. Generally, a lender will offer you 25% of your monthly gross income, so if you make $2500 every month, you’ll probably qualify for around $625.

One big problem that might be standing in your way is the laws in your state. Many states have put tight caps on the amount that you can borrow instead of banning payday loans outright. Check your local payday loan laws at this site.

Some online lenders will offer you more than what your state allows, but I’m not totally sure that’s legal.

How Much Does It Cost?

That link above for the payday loan laws also shows what the max is that you can be charged in your state. On average, it’s around $17 for each $100 that you borrow.

Make sure that your lender isn’t charging you to apply. That’s ridiculous, and I can’t believe that some of them still do it. If they’re going to charge you to apply just go find another lender.

How Long Does It Take?

The amount of time it takes for you to get your cash depends on how you get the loan and when you apply. If you’re getting your loan online the lender has to transfer the money to your bank account, which your bank then has to approve the funds transfer. This will normally show up the next business day. What this also means is that if you’re applying on the weekend, or late on Friday, it’s going to be a while before you get your loan.

Local payday loans are very different. They will approve your application and write you a check right there in their office. That entire process will only take a few hours from front to back, and these lenders generally stay open fairly late. The lender will probably offer to cash your check right there for a ridiculous check cashing fee. Skip that and just head to your bank and do it there for free.

How Do You Pay It Back?

Like the how long it takes, the method of paying it back depends on how you got the loan. If you got your loan online the lender will automatically withdraw the funds from your checking account. For local loans, you will have written them a post dated check when you got the loan, and they will cash it then.

Should You Get An Extension?

No. Requesting an extension on your loan makes payday loans insanely expensive. This is a trap that’s damn near impossible to get out of. You’re rolling the loan over and getting some more cash, and eventually this is the only way that you can get paid. Your paycheck goes to paying off some of the interest, and then you’re living on borrowed money! Don’t do it!