How Do Payday Loans Work?
If you are in need of cash fast and can’t wait until your next paycheck, a payday loan may help you out of a tough spot. But understanding how payday cash advances work is important before you do anything.
What is a Payday Loan?
Payday loans are short-term cash advances for employed borrowers that need money until their next pay day. For qualified applicants, they will be able to take out a loan for a portion of their paycheck. This let’s you get money in your pocket when an emergency arises that you can payback when your paycheck comes in.
Payday loans are typically 2 week long loans, with interest, to help consumers get through tough times and financial crisis. Typically ranging from $100-$1,500, a payday advance can help you when you are in trouble and get you through until your regular pay day.
How Do They Work?
For qualified consumers who have regular employment, a lender determines a portion of your paycheck net income that they will lend you. This is determined when you fill out documents about your current employment, pay-rate, and average check.
You and the lender come to an agreement on amount, payment date, and interest rate. This document is signed by you and the lender. At this point you give the lender either your checking account information or a physical check with the agreed upon amount dated for your next pay day.
If you are at physical payday lender, they usually will give you cash on the spot once the document is complete. If you are applying online, you will receive your loan in your bank account the next day.
The money is now available for you to use however you need! Once your next paycheck comes, the lender will automatically debit your account for the loan amount plus the agreed upon interest. No need to come back to a store or go back online! This process happens automatically.
Requirements and Qualifications to Receive a Payday Loan
Requirements in the United States for applying for an advance are the same online and in-person, though they vary by state.
- You must be 18 years of age or older and have an ID to prove it.
- You must have a checking account, you cannot use prepaid cards or virtual banks.
- You must have gainful and verifiable employment. Additionally, it must be regular income.
Additionally, payday advance loans are only available in the following US states:
Alabama, Alaska, California, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada, North Dakota, Ohio, Oklahoma, Rhode Island, South Carolina, Tennessee, Texas, Utah, Virginia, Washington, Wisconsin, and Wyoming.
Payday loans are prohibited in the following US states:
Arizona, Arkansas, Connecticut, Georgia, Maryland, Massachusetts, New Jersey, New York, North Carolina, Pennsylvania, Vermont, West Virginia, and the District of Columbia
Applying for a Payday Advance Loan: 2 Options
Getting a Payday Loan In-Person at a Store
You can apply for a cash advance in-person at any lender location. In order to apply in-person, find a lender near you using our search function, and bring a few things with you.
You will need to bring your identification in the form of a driver’s license, passport, or state ID. Additionally, you will need to bring proof of employment and 30 days worth of pay stubs. This is so the lender can be sure you are employed, expecting a paycheck, and can pay the loan back on time.
The lender will give you a series of forms to fill out about your current employment, your pay schedule, and your bank account information. You will need a valid checking account and your account number, as well a physical check with you when you come to apply.
At this point, wait your turn for the next available teller to begin the loan process. You will be provided with a total amount available for a loan and your payment due date. You and the teller will sign a contract agreeing on the interest rate, payment due date, and that everything you’ve provided is true. You will sign a check with the decided due date and amount.
Your teller will then give you cash and you are free to go! When your next paycheck comes into your account, you will automatically be debited for your loan plus interest. There’s nothing more you need to do!
Getting a Payday Loan Online from Home
Applying online is easy! Instead of driving to a lender, filling out paperwork, and waiting in line, you can simply fill out all the required information online and be approved in minutes! Apply with us today!
When applying online you will need to provide similar information as in-person, but have the luxury of doing it all in one place. You will need to take a picture or scan a copy of your ID and upload it. Enter your employment information, payday schedule, and banking account information.
Upload any required documents, such as pay stubs, and bank information in the document center.
You will automatically be provided with a max loan amount and you can select your desired payday advance amount. Simply check the required forms, e-sign the documents, and press go!
Agents usually approve applications in minutes and can request any additional information via a phone call or email to you. Once approved, you will have the money in your account the next day and your loan will be debited on your next paycheck!
That’s it! Applying online couldn’t be easier! It saves you time and let’s you fly through the process without the hiccups of in-person lending.
Payday loans can help you out of a tough situation. When times are hard, you may have no other option than taking out a short-term loan until your next payday. Sometimes, you just can’t wait.