Payday loans are small, short-term loans that are sometimes called "check advance" or "cash advance." (Don't confuse this "cash advance" with the term for borrowing money from a line of credit you already have. They are not at all the same.) There is no credit check for these payday loans, and most of them are for less than $1500. When money is tight, this kind of loan usually helps the borrower "get by" until their next paycheck.
How to get a payday loan is easy to understand. The easiest way to get a payday loan is to give the lender a check with a future date on it. This check will cover the amount of the loan plus interest. The borrower will get cash in return, and the lender will hold the check until the borrower's next payday. On the date written on the check, the lender can either cash it or take the money from the borrower's checking account electronically.
There are payday loan lenders everywhere these days. They usually work out of small shops. But big banks and other financial service providers have started to offer different kinds of payday loans.
Your regular bank may offer a new kind of payday loan. Check with your bank to see if they have something like a direct deposit advance. If you have your paychecks directly deposited into your checking account every week, your bank may offer you a small payday cash advance. When your next paycheck is deposited, the bank will take out the amount you borrowed plus the agreed-upon fee, which is usually between 10 and 20 percent.
Through your tax preparation service, you might be able to get payday loans with a twist. People who use these services to get their taxes done can now get loans against their tax refunds from many of them. They will give you a fixed amount of money as a loan, and that money, plus their fee, will be taken out of your tax return later.
There are also a lot of online lenders who will give you a payday loan. You have to fill out an online form and give a lot of personal information. After that, you will either be accepted or turned down. Most of them are approved, and you can get the money quickly through wire transfer or one of the other options.
Carefully consider who you get a payday loan from. Look around at different lenders before deciding which one to use. Some services cost much more than others, which will cost you more money in the long run. Also, you should be ready to pay back the payday loans as soon as you get your next paycheck. If you don't pay it back, you may have to pay extra fees and end up paying a lot more than you planned.
