If you are running out of cash and have a few days or a week between now and your next paycheck, you might consider online payday loans. These quick cash loans can help you cover the cost of auto repairs, daily expenses, and other short-term borrowing needs.
Fortunately, you can apply for payday loans online, eliminating the need to go to a bank or other local lender.
In this article, we’ll cover everything you need to know about payday loans online, as well as some of the best options available online today.
What Are Payday Loans?
A payday loan is a short term loan that usually carries a high rate of interest. The idea is that you will use the loan money to pay for things until your next payday and then pay it off in full when you get your next paycheck.
All payday loans are different, but they generally have many similarities. Due to the short term nature of these loans, they should generally be repaid in full within two weeks. They often only cover a small amount, usually a few hundred dollars or less. They also usually have extremely high interest rates and charge an administration fee and service fee as well.
Lenders generally expect payday loans to be paid off in one installment, and some offer rollovers for those who cannot pay in full and on time.
With payday loans, you can even get a loan with bad credit.
How Do Online Payday Loans Work?
Now that you understand what most payday loans have in common, you may be wondering how exactly they work. When you apply for a payday loan online, a company representative will usually call you and explain the terms of your loan. Then they will request electronic access to your checking account.
You will need to authorize a hold on your checking account to qualify for an online payday loan. This helps the lender to ensure that they will receive your paycheck in return for the loan.
Finally, you will sign the conditions of your loan. Then the lender will deposit the amount you borrowed into your bank account. You will have access to the money until you get paid. At that time, you will have to repay the loan plus fees and interest.
If you want, you can also carry the loan over to your next paycheck. However, during this period, your loan would charge interest and additional fees. It’s important to note that not all states allow rollovers, and if you’re already living paycheck to paycheck, it can be risky to continue paying fees.
Uses for payday loans
People choose to take out payday loans for several reasons. Typically, they need enough money to keep them floating until their next paycheck because they don’t have enough money set aside to cover their expenses. However, other reasons include:
- Emergency room – Medical care can be expensive and crippling if you have a medical emergency that is not covered by your insurance. To get quality care quickly, you may need to pay for your care up front. If you don’t have the money, a payday loan might be your best option.
- Legal needs – Some legal needs arise quickly, leaving people in need of money quickly. This may include the payment of a deposit.
- Car repairs – If you rely on your car to get to work, school and other places that affect your financial situation, a breakdown can be damaging to your finances. Therefore, you may need to take out a payday loan to cover the repairs and then pay it off when you get your next paycheck.
- Utility bills – If you have overdue bills, you may need to take out a payday loan to make sure they don’t close until your next paycheck arrives.
- Creditor late fees – If you miss credit card and other payments, companies are likely to charge you high fees. You may be able to avoid or minimize these fees by taking out a payday loan.
How To Find The Best Payday Loans Online
When shopping for a payday loan, you should know what the best payday loan lenders have in common. Not only will it save you money, but you’ll have a more positive experience when you know what you’re looking for.
The APR, or annual percentage rate, is the interest you will be charged on your loan. A higher interest rate can make or break your ability to repay the loan. You should look for a lender who offers a low APR and always do the math before taking out a loan. When shopping, be sure to compare the APR for each loan and understand what the total cost of the loan will be when you pay it off.
The fees also help make payday loans difficult to repay. Some loans have origination fees, maintenance fees, etc. Make sure you understand all of the fees that will be included in your loan and take them into account when calculating the total cost of your loan.
No impact on your credit
A huge advantage of payday lenders is that they usually don’t consider your credit when deciding who to lend to. If you can’t get a loan from a bank or credit union because of bad credit, a lender who doesn’t check your credit might be a good option for you.
Quick registrations and deposits
Most online payday lenders have a quick registration and deposit process. This means that you could get the money you need today rather than going to the bank and waiting for the loan to be approved. Some online lenders even offer instant deposit programs.
What to watch out for
If you are considering an online payday loan, it is also essential to understand the risk involved. If you can’t cover your expenses and pledge your future paychecks to a lender, you may not be able to repay the loan and the fees. Even if you can, this will leave you with less money to use between paying off the loan and your next paycheck.
Therefore, make sure you understand what the loan will cost you once it’s paid off and how much money you expect to receive on your next paycheck. This will help you avoid the ârevolving doorâ of payday loans.
Best Payday Loans Online
Now that you understand how payday loans work, you can start looking for the best payday loan online for you.
1. MoneyLion Instacash
MoneyLion Instacash is an easy way to get cash fast. Simply download the Instacash app and immediately request Instacash cash advances. You will be able to access your next paycheck sooner and with a 0% APR. With MoneyLion, you can get up to $ 250 immediately and pay a $ 0 fee if you use their auto deposit feature.
LendUp will lend up to $ 255 and make payment on the same day a user applies. Their financing costs can reach $ 45, leaving borrowers to pay $ 300 after two weeks. They don’t check your FICO credit score or apply for serious credit. The business exists entirely online, making online communication and applications a breeze.
3. Check in with cash
This company has more than 800 physical storefronts and offers quotes and online applications. Online applications are usually approved within an hour and new users can borrow up to $ 750. Their fees and interest can equal up to an APR of up to 400%.
LightStream offers same-day financing for payday loans and personal loans if your application is approved by 2:30 p.m. EST on a regular business day. This company offers no fees and even offers discounts if you sign up for automatic payment.
However, they require several years of credit history and a minimum credit score of 660. The business will lend up to $ 100,000, but generally less for those who choose to receive payday loans.
This lender is the best for quick approvals as they usually approve loans within an hour of receiving online applications. Although they offer a plethora of online resources, this lender is not available in all states. The business typically lends between $ 100 and $ 3,000 in one-time payments, depending on your income.
6. Check ‘n Go
This company is best known for its more than 1,000 storefronts nationwide. It has modest interest rates compared to its competition and allows users to apply for payday loans online. They are operational in 27 states and allow borrowers from 16 states to apply online. Users can borrow from $ 300 to $ 3000 from this lender.
7. Fast cash
This lender allows borrowers to take out loans of $ 100 to $ 500 at a time and offers lower repayment fees than some of the other lenders on this list. They have 200 storefronts in 14 states. Users should be aware that they don’t have a BBB rating, but are rated 4.6 / 5 stars on Trust Pilot. They are also one of the oldest payday lenders available online and have been issuing payday loans since 1997.
The bottom line
Payday cash advances can be risky but are necessary for some to cover their expenses. Most people can get same-day cash deposits into their bank account and repay the loans when they get their next paycheck. Online payday loans generally don’t require a good credit score and can help you move forward until you get your next paycheck.
Michael started Your Money Geek to make personal finance fun. He has worked in personal finance for over 20 years, helping families lower taxes, increase income, and save for retirement. Michael is passionate about personal finances, side activities and everything geeky.