7 Things You Should Know About Online Payday Loans

According to some research, 12 million Americans have used payday loans in 2010. 

If you need cash quickly, many people will turn to payday loans for cash quickly. However, there are a few things you should know before you start taking out online payday loans.

Keep reading to discover a few things about an online payday loan.

1. Interest Rates Can Be High

When you get fast cash loans online, keep in mind that you could be looking at a high annual percentage rate (APR). This is the amount of interest you’d have to pay for borrowing that money. 

With payday loans, you could have interest rates that are triple digits. Payday lenders say that an APR isn’t the best way to measure a short-term loan, and some say that they want to do 1% of interest per day.

This might sound cheap, but you’ll have to pay back a lot more money than you borrowed. If you do need to take out payday loans, make sure that you repay them back as soon as you can to avoid these high-interest rates.

2. There Aren’t Any Credit Checks

With payday loans, you won’t have to worry about them checking your credit. This is great for people who don’t have any credit or have a low credit score. This also means that there’s no credit check which could hurt your credit. 

You have to meet other requirements, but they won’t look at your credit score. A payday loan is a great way to avoid the issue of having a credit history and still letting you get emergency cash.

3. How Payday Loans Operate

In general, to take out a payday loan, you’ll need to write a check that is made to the lender for the full amount that you want to take out. You’ll also have to include any fees associated with the loan. 

If you don’t have a checkbook, the lender can debit your checking account as well and give you the cash. Then, the loan will be due by the next payday. 

Keep in mind that some states set a cap for the amount that you could take out as a loan. 

4. You Can Borrow Money for Any Reason

With some loans, you can only take out money for a certain reason. However, payday loans can be used for anything. You can use it to fix your car, pay your rent, or buy furniture. 

You also don’t have to use it just for an emergency. However, because of the high-interest rates, it’s best to save this for only emergencies. This is a great way to get some extra cash without having to explain why you need it. 

An advantage of getting a payday loan is that there aren’t any restrictions. This way, you can use this loan with all kinds of flexibility. 

5. Look at the Fine Print

Before you sign for a payday loan, make sure that you understand all of the fine print. They’re very similar to personal loans, and they’re both unsecured loans.

That means that you don’t have to have any collateral to back up the loan. If you don’t pay back the loan, they can’t take your house or other possessions. However, there are other things that play into the loan.

For example, look at the borrowing terms. This means that you could have up to a year until you have to pay back the payday loan. The timeline will be different each time, but it’s common for them to be paid back in just a few weeks. 

The full payment will normally be due by the next time that you get paid. You’ll also take out a payday loan for a smaller amount, typically under $1,000.

The interest rates are normally higher, but they will depend on who your lender is and how much you’re going to borrow. You’ll also want to check the terms for how you’re supposed to repay them. 

If your check bounces or you can’t pay back the full amount, then you’ll have to roll the loan over until the next day. However, there are high fees for doing this. 

6. It’s Illegal in Some States

Some states will also regulate payday loans in their state, so you’ll want to check what the state laws are in your area. Some states will prohibit payday loans, and some will regulate how much you can take out. 

The problem is that some states don’t have clear definitions for what a payday loan is. Your state might have different definitions, so you’ll need to find a chart that explains what a payday loan is or not. 

7. They Can Get Access to Your Bank

Keep in mind that depending on how you pay the lenders will give them access to your bank through your debit card or routing number. 

Continuous payment authorities (CPAs) will let lenders take payments from your bank without asking you first. So if you don’t plan on repaying your lender, then this could be challenging and cause you to lose money. 

They’re quick to set up, and they can be very difficult to cancel. If you want to still have control of your finances, this may not be the best option.

Discover More Things to Know About Online Payday Loans

These are only a few things to know about online payday loans, but there are many more things to keep in mind. 

We know that applying for payday loans might not be the best option, but there are still other emergency loans that can get you the cash quickly, even if you have a low credit score. 

Check out our website today to get approved for a loan and get cash as soon as tomorrow!