Payday Loans Online: Everything You Need to Know

Financial emergencies happen, and over half of the people in the United States have less than $500 in savings. Many Americans have no savings at all. What’s more is that financial products like personal loans and installment loans often require high credit scores and processing times of up to 3 or 4 weeks, which is useless when you need cash fast. Fortunately, there are other options. Online payday loans and cash advances can provide the financial support that you need in an emergency, so long as you choose them carefully.

What is a Payday Loan?

A payday loan is a short-term loan that offers instant access to funds, with many online loans funded within as little as 24 hours. These loans are very different from traditional lending options. For starters, while they may lack origination fees, they do have much higher interest rates to consider. These loans are also not designed for long-term financial needs. They are specifically for emergencies, and usually require repayment within 30 days.

Many online lenders are beginning to explore payday advances in an installment format, allowing borrowers to pay back the loan over time rather than in a lump sum. This option is going to be more expensive because borrowers will pay more interest, but it can provide more flexibility for those who need it. Online cash advances like this don’t require a good credit score, because no credit check is required for approval. Borrowers simply need to provide proof of income and a checking or savings account for the deposit and subsequent repayments.

How to Apply for a Payday Loan?

Applying for a check advance loan like this is relatively simple. The most important thing is to find a reputable lender to work with. Because of the nature of these loans, many unscrupulous companies prey on desperate borrowers with high rates and bad lending practices. Look for a lender who truly wants to help you through your financial crisis.

A lender will need basic personal information including things like: name, address, phone number, and employment and banking information. They will also ask how much money you need to borrow. Keep in mind that with this type of loan, you cannot borrow more than you earn in a single pay period. Therefore, if you need $5,000 for a new furnace and only make $1,100 per pay period, this type of loan will not meet your needs.

Once you have completed the application, the processing will begin. Lenders will require you to provide check stubs and bank statements or account numbers in order to verify your financial information. As long as the information matches what you have provided, these loans will usually be approved the same day.

Pros and Cons of Online Payday Advance Loans

Pros:

  • This is a helpful short-term financial solution for those who need emergency funds.
  • These loans can help you avoid overdrafts, service disconnections, and other financial issues.
  • The application and approval process is quick and easy.
  • People without credit or with bad credit can get funds.
  • New online options offer longer terms for payback with installment loans.
  • Money is available instantly at physical locations, and within 24 hours for online loans.

Cons:

  • These loans have high interest rates than traditional loans.
  • The repayment may impact whether or not you can pay your other bills.
  • When used incorrectly or irresponsibly, these loans can sometimes create debt traps.
  • You can only borrow as much as you earn in a pay period.
  • Loans usually require a quick repayment, often within two to four weeks.

Payday loans may be an effective solution for those who need access to money quickly. However, because of their high interest rates and short repayment terms, they may not provide the ideal solution for everyone. Be sure to get the facts and choose a reputable lender to make the most of an online cash advance when you need it.