Get a Payday Loan

When money is tight, you might need a short-term loan. One option is a payday loan, which is also called a cash advance loan, check advance loan, or deferred-deposit check loan. In the U.S., the Federal Trade Commission calls payday loans “costly cash” because of their very high interest rates. You normally have to pay the loan back by your next pay day. If you can afford to use an alternative means of borrowing money, it is a good idea to do so.

Steps

Gathering Required Information

1. Find proof of income. The lender will need some sense of your income, so gather recent pay stubs or bank statements that show how much you’ve been paid.
2. Gather acceptable personal identification. Payday lenders will want to see that you are a resident of the state where you are getting your loan. Generally, you should have a state-issued ID, such as a driver’s license or an identification card.
3. Get other financial information. Some lenders will want to see financial information in addition to your income. For example, you might need proof that you have a bank account.
4. Take a blank check with you. The blank check is a way for the payday lender to make sure you pay the loan back. When your loan is due, the lender can cash the check. The check must be blank so that you can fill in the necessary amount once you have talked to the payday lender about the fees that will apply to your loan.
   • Some lenders might ask for your bank account routing number so that they can withdraw the amount directly from your account. You can find the routing number on a check.

Obtaining Your Payday Loan

1. Find payday lenders. You can find them in your phone book or online. Many companies now offer online payday loans. You submit your application online and the money is deposited into your account.
   • Not every state allows payday lenders. In fact, payday lenders are illegal in 18 states and the District of Columbia. Search online to see if payday lending is allowed in your state.
2. Research the lender carefully. There are many scammers in this field. Carefully investigate any lender before applying for a payday loan. Look up the lender in the Better Business Bureau, which collects complaints about businesses. Also perform a general Internet search to see the company’s reputation.
   • Most payday lenders have countless complaints lodged against them. If you are worried about doing business with a payday lender, consider other alternatives.
3. Talk to the loan officer about fees and interest rates. This is where payday lenders make the bulk of their money. They charge very high interest rates and tack on fees for a variety of reasons. Ask the loan officer about everything that will be charged.
   • For example, you will probably be charged a fee just to apply for the loan. This is called a “service fee.” If you request a $500 loan, you might pay a $125 service fee. In this example, you are paying about a 625% APR (annual percentage rate) just to take out a short-term loan. This sky-high interest rate is standard.
   • The lender may also charge a fee to withdraw money from your bank account.
4. Find out when the loan is due. You must clearly understand every aspect of the loan. Payday lenders have a reputation of hiding important information. Ask the loan officer point blank when the loan is due. Get something in writing as well.
5. Ask about repayment options. You might prefer to take a payday loan from a lender that gives you more options for paying back the loan. Ask the following before applying:
   • Can you pay back the loan early? Check if you are charged a fee for doing so.
   • What if you don’t have the money to cover repayment? Some lenders will let you extend the due date—but it’ll cost you. Make sure you understand how much you will be charged to extend the loan.
6. Complete an application. Each lender has its own application. However, they generally will want information about your employer, annual income, date of birth, Social Security Number, phone number, and address.
   • Realize that many lenders will sell your personal information to third parties. Don’t be surprised if you start seeing advertisements for loans appearing in your mailbox soon after applying for a payday loan.
7. Receive your cash. Some lenders will hand cash over to you, but others will deposit it directly into your bank account. Ask how you will receive your funds.
8. Pay back the loan on time. When the loan is due, your lender will either cash the check or make a withdrawal directly from your bank account. If you don’t have enough money to cover the entire payment, the check will bounce. The lender then might try to withdraw smaller amounts in order to get as much money as they can out of your account.
   • Every bounced check will cost you in overdraft fees.
9. Extend or renew the loan. If you know you can’t make payment, ask about extending or renewing the loan. Doing so will increase the amount you owe. Ask about fees and interest rates before signing up.
   • Check if you the lender offers a repayment plan. In some states, this is mandatory.

Considering Your Other Options

1. Talk to your creditors about an extension. Many lenders, including credit card companies, might be willing to delay payment for a short period of time if you are in a cash crunch. Call up customer service and explain your situation. You might be able to make regular partial payments.
   • Creditors want to see that you have a plan for getting on top of your finances. Ideally, you’ve fallen behind because of an event beyond your control, such as short-term unemployment or a medical emergency. This emergency should have passed.
2. Ask your boss for an advance. Speak to your boss and explain that money is a little tight. Ask if you can get an advance on your next paycheck. If your boss can help you out, then you’ll save a lot of money by not needing to go to a payday lender.
   • You don’t need to go into great detail with your boss about your financial difficulties. Instead, speak generally.
3. Ask friends or family for a small loan. People who know you might be willing to help you out. Tell them what you need the money for and agree to pay them back as soon as possible.
   • You can also agree to pay interest. Paying interest shows you are serious about paying the money back. Check your jurisdiction’s usury laws online, which will set the maximum interest rate allowed. With luck, your family member will charge only a small interest rate.
4. Use your bank’s overdraft protection. Many banks allow you to take out more money than you have in your account. This is called overdraft protection. Generally, you will pay a small fee for taking out too much money. However, the fee will be much lower than the interest on a payday loan.
   • Avoid using “bounce protection” overdraft. The APR on these programs can reach 1,000%.
5. Obtain a personal loan. Someone with a decent credit score should go to a bank or credit union and ask for a personal loan. These loans will have much lower interest rates than payday loans. You might also get a personal loan from an online lender. Research an online lender just as you would a payday lender. Online lenders should not charge upfront fees or pressure you to wire them money.
   • Personal loans can usually be paid in monthly installments over several years. This makes repaying the loan much more manageable.
   • To get a personal loan, you’ll need to have a credit check.
6. Apply for a payday loan alternative with a credit union. Credit unions offer small loans for much lower interest rates. You can borrow between $200-1,000. You only pay a small application fee and get one to six months to pay it off.
   • Typically, you must have been a member of the credit union for at least one month before you apply.
7. Take a cash advance from a credit card. Your credit card probably lets you take out cash from an ATM. Check your monthly statement to see. There should be a “cash limit” amount listed. Cash advances are expensive—interest rates usually are around 30% or higher. Also, you might be charged fees on top of the interest rate. However, a cash advance is cheaper than a payday loan.
   • You’ll also get to pay off the cash advance over several months, which might be easier on your finances.
   • Don’t assume you don’t qualify for a credit card if you have poor credit. Shop around online.

Tips

• If you are constantly falling behind on bills, consider meeting with a credit counselor. A counselor can review your expenses and help you come up with a budget that will allow you to live within your means.

Related Articles

• Stop Payday Loans
• Budget Your Money
• Get a Payday Loan

Quick Summary

Template:Summary:Get-a-Payday-Loan

See also

• Surprise Your Sweetheart in a Small Space
• Survive and Thrive in Your First Organic Chemistry Class
• Make Vanilla Sugar
• Plan a Valentines Day Date in Elementary School
• Increase Your Password Security in Windows 2000
• Play Mental Tic Tac Toe
• Avoid Harming Your Puppy
• Maintain Good Credit
• Avoid Getting Into an Argument over Harry Potter
• Make Your Facebook Page Viral

Read more ...

What links here

• Get Payday Loans With Bad Credit
• Apply the Cashflow Quadrant Concept
• Borrow Money With Bad Credit
• Consolidate Loans
• Get Fast Cash
• Get a Fast Loan Online