Looking for payday loans? Need money for an emergency? This article will help you understand payday loans and suggest much better alternatives.
If you still feel like a payday loan is right for you, we have reviews and comparisons of payday lenders.
But, before we get into reviews and comparisons…
There are a few facts you should be aware of. Before jumping into anything, be sure to read this entire article.
What Are Payday Loans?
Payday loans allow you to borrow a small amount of money and pay it back on the date of your next paycheck. Most lenders let you borrow anywhere from $100 up to $500.
Tip: If a lender offers an amount higher than $500, it’s an immediate red flag. It’s a sign of irresponsible lending practices and you could be dealing with a loan shark.
How Payday Loans Work
Payday lenders are now few and far between. Federal authorities and government regulations have cracked down on lenders.
Simple. Many lenders were causing good people to drown in debt.
- Charging triple digit, high interest rates.
- Some lenders charged APR in the 4 digits
- Tricking consumers into signing loan documents without reviewing rates and terms first
- Charging excessive fees, in addition to high interest rates
- Rolling the loan over every 30 days
- Preying on consumers with bad credit
That said, here’s how payday loans work.
- Find a lender that operates legally in your state. See our payday lending laws below to see if it’s legal in your state.
- Once you find a lender, complete the online application
- To complete the application, you’ll need the following. Requested loan amount, driver’s license, and checking account information
- Review the loan terms and interest rates
- Make sure you can repay the loan back by your next paycheck
- If all is good, sign your loan documents
- Lenders deposit funds into your checking account within 24 business hours
Types of Payday Loans
Payday Loans Online
Lenders that have permission in certain states also have an online application. Even though they offer an online application, it doesn’t mean you’re eligible. You still need to live in the state which the lender operates.
If that’s the case, you can complete the online application. And if approved, get the funds deposited into your checking account.
Review state laws below to see if you’re eligible.
Same Day Payday Loans
Most lenders do not offer same day payday loans. There are exceptions. If you apply before a certain time of day (i.e, before noon), it’s possible you’ll get your loan the same day.
If not, you’ll need to wait the full 24 business hours.
1 Hour Payday Loans
You might find it difficult to find a lender that offers a 1-hour pay day loan. Here’s why: as mentioned, federal and state legislation has cracked down on lenders. Offering loans this fast, within 1 hour, is a sign of irresponsible lending.
3 Month Payday Loans
There is no such thing as a 3-month payday loan.
Some lenders let you pay the loan back in installments, with the max being 90-days.
More lenders today are adopting this strategy. And its easy to figure out why. Instead of “payday loans”, they can call this an installment loan. And by doing this, the laws and regulation are more lenient.
Bad Credit, No Credit Check Payday Loans
Any lender that claims to not check your credit…run far away. This is a very clear sign of irresponsible lending and may be against the law in your state.
Most lenders will run a soft credit check to see where you stand on your finances.
Tip: A soft credit check will not hurt your score.
Fast Payday Loans
Lenders can fund payday loans fast. You can expect to have the funds in your checking account within 24 business hours.
Again, if you are looking for a same day or 1-hour loan…
Disappointed, you will be.
Payday Loan Direct Lenders
Some websites are direct lenders, while others have a network of lenders. Which way is better?
Direct Lenders – If you apply on a direct lender’s website, you will get rates and terms from that lender only. You may not get the best deal. Unless, you go to many lenders and repeat the process.
Network of Lenders – Often times, your best bet is to submit your information to a network of lenders. With one application, you’ll get many loan offers. Our website, GoLoans, does just that. With over 100+ bad credit lenders available, we can get you the best rates and terms.
Payday Loan Laws
As mentioned, the laws have cracked down. This type of loan isn’t available in every state–even if you try to apply online.
Responsible lenders will deny your application if you live in a state that has laws against it.
See what the state laws say about payday lending in your state below.
Payday Loan Rates and Terms by State
|State||Legal Status||Citation||Max Loan Amount||Loan Term||Max Fees||Finance Charge per $100||APR for 14-day $100 Loan|
|Alabama||Legal||Ala. Code §§ 5-18A-1 et seq.||$500||10-31 days||17.5%||$17.5||456.25%|
|Alaska||Legal||Alaska Stat. §§ 06.50.010 et seq||$500||Min: 14 days||$5 + the lesser of $15 per $100 or 15%||$20||520%|
|Arizona||Prohibited||Consumer Lenders Act applies. Ariz. Rev. Stat. Ann. §§ 6-601 et seq||Not applicable||Not applicable||Not applicable||Not applicable||Not applicable|
|Arkansas||Prohibited||Ark. Code Ann. 23-52-101 et. Seq., repealed 2011||Not applicable||Not applicable||Not applicable||Not applicable||Not applicable|
|California||Legal||Cal. Fin. Code §§ 23000 to 23106||$255||Max: 31 days||15% of check||$17.65||459%|
|Colorado||Legal||Colo. Rev. Stat. 5-3.1-101 et seq.||$500||Min: 6 Months||20%: $0-$300 + 7.5%: $301-$500 plus 45% per annum interest plus monthly maintenance fee $7.50 per $100 borrowed, up to $30, after first month.||Not applicable||Not applicable|
|Connecticut||Prohibited||Conn. Gen. Stat. §§ 36a-563 et seq||Not applicable||Not applicable||Not applicable||Not applicable||Not applicable|
|Delaware||Legal||Del. Code Ann. Tit. 5 2227 et seq.||$1,000||Less than 60 days||Not Specified||No limit||No Limit|
|Florida||Legal||Fl. Stat. Ann. §§ 560.402 et seq.||$500||7-31 days||10% of check + verification fee not to exceed $5||$16.11||419.%|
|Georgia||Prohibited||Ga. Code Ann. §§ 16-17-1 et seq.||Not applicable||Not applicable||Not applicable||Not applicable||Not applicable|
|Hawaii||Legal||Hawaii Rev. Stat. Ann. 480F-1 et seq.||$600 face amount of check||32 days||15% of check||$17.65||459%|
|Idaho||Legal||Idaho Code §§ 28-46-401 et seq.||$1,000. Loan cannot exceed 25% of gross monthly income of borrower.||Not Specified||Not Specified||Not specified||No Limit|
|Illinois||Legal||815 ILCS 122 et seq.||Lesser of $1000 or 25% gross monthly income. Payday installment loan lesser of 22.5% gross monthly income or $1,000.||13 to 120 days. Payday installment loans 112 to 180 day terms.||$15.50 per $100, plus a $1 verification fee||$15.5||403%|
|Indiana||Legal||Ind. Code §§ 24-4-4.5-7-101 et seq.||$550 (not to exceed 20% of borrower's monthly gross income)||Min: 14 days||15%: $0-$250; 13%: $251-$400; 10%: $401-$500||$15||390%|
|Iowa||Legal||Iowa Code Ann. 533D.1 et seq.||$500||31 days||$15: $0-$100 on face amount of check; $10 per $100 thereafter||$16.67||433%|
|Kansas||Legal||Kan. Stat. Ann. § 16a-2-404, 405||$500||7-30 days||15% of loan||$15||390%|
|Kentucky||Legal||Kentucky Rev. Stat. Ann. §§ 286.9.010 et seq.||$500||14-60 days||$15 per $100 on face value of check + $1 database fee||$17.65||459%|
|Louisiana||Legal||La. Rev. Stat. Ann. §§ 9:3578.1 et seq.||$350||60 days or less||16.75% of face-value of check, + $10 documentation fee (After default: months 1-12: 36% per year; months 13 and beyond: 18% per year)||$30||780%|
|Maine||Legal||Me. Rev. Stat. tit. 9-A § 1-201||Not specified||Not Specified||Not Specified||Not Specified||Not Specified|
|Maryland||Prohibited||Md. Code Com. Law § 12-101 et seq.||Not applicable||Not applicable||Not applicable||Not applicable||Not applicable|
|Massachusetts||Prohibited||Mass. Gen. Laws Ann. ch. 140 §§ 96 et seq||Not applicable||Not applicable||Not applicable||Not applicable||Not applicable|
|Michigan||Legal||Mich. Comp. Laws §§ 487.2121 et seq||$600||31 days||15% of first $100, 14% of second $100, 13% of third $100, 12% of fourth $100, 11% of fifth $100, 11% of sixth $100 + any database verification fee||$15||390%|
|Minnesota||Legal||Minn. Stat. 47.60 et seq.||$350||Max: 30 days||$5.50: $0-$50; 10%+$5: $51-$100; 7% (min. $10) + $5: $101-$250; 6% (min. $17.50) + $5: $251-$350 (After default: 2.75% per month)||$15||390%|
|Mississippi||Legal||Miss. Code Ann. §§ 75-67-501 et seq.||$500 face value of check||Under $250: maximum of 30 days; $250-$500: 28-30 days||Under $250: $20 per $100 advanced; $250-500: $21.95 per $100 advanced||$20||520%|
|Missouri||Legal||Mo. Rev. Stat. §§ 408.500.1 et seq.||$500||14-31 days||Not Specified||$75||1950%|
|Montana||Prohibited||Mont. Code Ann. 31-1-701||Not applicable||Not applicable||Not applicable||Not applicable||Not applicable|
|Nebraska||Legal||Neb. Stat. Ann. §§ 45-901||$500||Max: 34 days||$15 per $100 or pro rata for any part thereof on amount of check||$17.65||459%|
|Nevada||Legal||Nev. Rev. Stat. 604A.010 et seq.||25% of expected gross monthly income||35 days||Not Specified||No Limit||No Limit|
|New Hampshire||Prohibited||N.H. Rev. Stat. Ann. 399-A:1 et seq.||Not applicable||Not applicable||Not applicable||Not applicable||Not applicable|
|New Jersey||Prohibited||N.J. Stat. Ann. tit. 17:1 et seq||Not applicable||Not applicable||Not applicable||Not applicable||Not applicable|
|New Mexico||Legal||N.M. Stat. Ann. §§ 58-15-32 to 38||$2,500||35 days||$15.50 per $100; $.50 verification fee per $100||$16||416%|
|New York||Prohibited||N.Y. Penal Code 190.40||Not applicable||Not applicable||Not applicable||Not applicable||Not applicable|
|North Carolina||Prohibited||N.C. Gen. Stat. 53-281||Not applicable||Not applicable||Not applicable||Not applicable||Not applicable|
|North Dakota||Legal||N.D. Cent. Code 13-08-01 et seq.||$500||Max: 60 days||20% + databasing fee||$20||520%|
|Ohio||Legal||Ohio Rev. Code Ann. 1321.35 et seq||$500||Minimum: 31 days||28% annual interest||$1.08||28%|
|Oklahoma||Legal||Okla. Stat. Tit. 59 §§ 3101 et seq.||$500||12-45 days||$15 per $100: $0-$300; an additional fee of $10 per $100: $301-$500||$15||390%|
|Oregon||Legal||54 Or. Rev. Stat. § 725A.010 et seq.||$50,000 (Loan limit up to 25%of borrower’s net monthly income if earns $60,000 per year or less.)||31 to 60 days||36% APR interest, one-time $10 per $100 of loan origination fee, up to $30||$13 for 31 day loan||154% APR for 31 day loan|
|Pennsylvania||Prohibited||63 Penn Stat. Ann. § 2325||Not applicable||Not applicable||Not applicable||Not applicable||Not applicable|
|Rhode Island||Legal||R.I. Stat. Ann. 19-14.4-1 et seq.||$500||Min: 13 days||10% of funds advanced||$10||260%|
|South Carolina||Legal||S.C. Code §§ 34-39-110 et seq.||$700 or 30% of gross monthly income, whichever is less||Max: 31 days||15% of principal||$15||390%|
|South Dakota||Prohibited||S.D. Codified Laws 54-4-36 et seq.||Not applicable||Not applicable||Not applicable||Not applicable||Not applicable|
|Tennessee||Legal||Tenn. Code Ann. 45-17-101 et seq.||$425 ($500 check)||Max: 31 days||15% of the face value of the check||$17.65||459%|
|Texas||Legal||5 Tex. Fin. Code §§ 393 et seq||Not specified||Up to 180 days for CAB agreement||No cap on Credit Access Business fees. Lender interest capped at 10%||No Limit||No Limit|
|Utah||Legal||Utah Code Ann. 7-23-101 et seq||No limit||May not exceed 10 weeks||No usury limit||No Limit||No Limit|
|Vermont||Prohibited||Vt. Stat. Ann. tit. 9 § 41a.||Not applicable||Not applicable||Not applicable||Not applicable||Not applicable|
|Virginia||Legal||Va. Code Ann. §§ 6.2-1800 et seq.||$500||Min: 2 pay periods||36% annual interest + $5 verification fee + 20% of loan||$26.38||687%|
|Washington||Legal||Wash. Rev. Code Ann. 31.45.010 et seq.||$700 or 30% of gross monthly income, whichever is less||Max: 45 days||15%: first $500; 10%: remaining portion of the loan in excess of $500 up to the $700 maximum||$15||390%|
|West Virginia||Prohibited||W. Va. Code § 46A-4-101 et seq.||Not applicable||Not applicable||Not applicable||Not applicable||Not applicable|
|Wisconsin||Legal||Wis. Stat. 138.14||Lesser of $1,500 including fees or 35% gross monthly income||90 days or less||No Limit||No Limit||No Limit|
|Wyoming||Legal||Wy. Stat. 40-14-362 et seq.||Not specified||1 calendar month||the greater of 20% per month or $30||$30||780%|
Payday Loan Alternatives
Installment loans are a much better alternative. Instead of paying the loan back on your next payday, you pay it in installments. The installment period can be anywhere from 3 months, up to 12 months. Installment loans have similar interest rates as a payday loan.
It’s best to repay this as soon as you can.
Credit Union Loans
Did you know that credit unions fight for your business? It’s true. The majority of people use banks. And credit unions offer special incentives and financing to get people in the door.
Even if you have bad credit, they may still work with you.
Family and Friends
No one likes to borrow money from family or friends. But sometimes, emergencies happen. And your closest family and friends understand that.
Don’t feel like you can’t ask them for help. If it’s a good enough reason, they should follow through.
Make sure you pay them back as soon as you can. This way, they will be more inclined to loan money to you next time.
And, you won’t have to pay interest.
Sell Unwanted Items on Amazon or eBay
If this sounds like too much work, don’t let that stop you. If you think you don’t have anything worth buying, don’t let that stop you either.
People buy the strangest things on Amazon, but especially eBay.
Look in your attic or garage for things to sell. Then, go on either site and see what people are willing to pay for those items.
You might be surprised at what you find.