Payday loans compare
Payday loans are popularly-known for having high interest rates and charges that can lock you up in an endless debt cycle. Borrowers often find themselves securing additional loans since they couldn’t settle the first loan that they applied for. With this negative reputation about pay loans, it is much better that you seek for other financial solutions before you apply for short-term loan. Here are some potential alternatives that you can opt for:
• Payment Extensions – visit your bill providers and talk to them if they could give you a longer payment period or extend your due date, in case you will fall behind your payments.
• Local Sources – you can ask help from nonprofit or local charities and government agencies around your area. These local sources usually provide free financial services and aid for rent, food, utilities, and other expenses.
• Extra Income – the booming online marketplace can be your next destination to earn some sweet cash. You can sell some of your unused things, deliver food, or work as a driver for rideshare services.
How do I Apply For Payday Loans?
Though the real application procedure will depend on the lending company that you choose, here are the standard steps that you need to follow if you want to apply for short-term payday loan.
1. Go to the website of the lending company of your choice or look for a lender via a comparison tool.
2. Fill out an application form with accurate information about yourself. These include your contact details and Social Security number.
3. Provide details about your job or benefits in case you are on welfare or other similar programs.
4. Give appropriate details about your salary, including the date and amount.
A reputable provider of payday loans in UK will offer you a secure online application and draft your final loan amount to guarantee that you know the exact amount of your loan – including the interest rates and additional fees.
Payday Loans vs Other Loan Types
Payday loans are short-term loans that are well-known for having the shortest term period and highest APRs, making them one of the most costly type of loan. Apart from this, here are the features of payday loans that set them apart from other kinds of credit.
• Shorter Loan Term – since payday loans are specifically made to be a convenient short-term solution for your debts and financial emergencies, you won’t find a loan that lasts for more than six months – at least for UK payday loans but it might differ in other states.
• Surging interest rates and additional charges – if you compare payday loans to other types of credit, they have much higher APRs. Many states control how much a lending company can charge, however it might still end up with more than 300% of APR.
• Accepts bad credit – the unique feature about lending companies that offer payday loan is they don’t carry out a credit check via traditional credit agencies. Instead, you just need to follow their requirements that include a regular source of income.
• Smaller amount of loans – the amount that you are allowed to take out will depend on the state that you liv in, however you can usually borrow around $100 – $1,000.
Fees Charged by Payday Loan Companies
Payday loan companies typically charge a fixed amount of fee that depends according to the laws in your state and the amount you want to borrow. Generally, it can be around $10 – $30 per $100 borrowed. With this, APR can cost as much as 300% or higher. If you wanted to borrow funds from a payday loan, make sure that you read the fine print carefully. Look for additional fees that might be charge to you when you borrow.
As aforementioned, the fees charged by payday loan companies vary according to the laws on your state. But, here are the top five most popular fees that are charged when you borrow from a payday loan.
1. Returned check or non-sufficient funds (NSF) fees
This fee is regulated under state law and it is typically charged if you the lending company was unsuccessful to withdraw the repayment from your bank account.
2. Late payment fees
This few is specifically charged if you fail to repay your loan. The fixed amount depends on the laws on your state.
3. Bank fees
If the lender tries to withdraw the repayment from your bank account and it has insufficient funds, you will be charged with bank fees.
4. Rollover fees
In the case that you will borrow additional amount of loan from the same lender, they might charge you with a rollover fee that you have to settle together with your loan amount.
5. Prepaid debt card fees
There are lenders that provide prepaid debit cards, but watch out for these offers since you might be charged with monthly fees, application fees, and payment fees.
Do I Have to pay for Interest?
Not really. Payday loans are known to have higher APR but this isn’t due to sky-rocketing interest rate. APR simply refers to the total cost of the loan in percentage, as well as the fees and interest. Given that payday loans are short-term loans, adding interest doesn’t makes sense because of the constricted time period. So the next time you think about the high APR of a payday loan, take note that it is just a reflection of the high fees of the loan and not its interest rate.
The Legality of Payday Loans
It all varies on which state you reside. There are some states that don’t allow payday loans by implementing a limitation on the interest rates. This is called a usury law. Others put limitations on how much lending companies can charge their consumers and enforce other regulations to safeguard them. However, there are still a lot of states that allow lending companies to offer payday loan without any restrictions nor limitations.
Restrictions On Funds Loaned
Though you can utilize the money that you obtained from a payday loan for different purposes, restrictions are imposed on how you can spend it. Basically, the borrowed funds can’t be utilized to pay for illegal purchases, college expenses, gambling, and more. Restrictions may vary from lender to lender so you might as well check to make sure that you aren’t violating anything.
Considerations Before Borrowing
Before you decide to apply for a payday and submit your application, use this guide to familiarize yourself with the downsides linked to this type of credit.
• Unreliable lending companies – though there are plenty of reputable and trustworthy lenders out there, there are still unreliable ones that are operating to put you in an endless cycle of debt. See to it that the lender that you will work with is legit and certified.
• Skyrocketing costs – payday loans are known for their ultra-expensive APRs that can reach as much as 300% or higher. Make sure you read the terms and conditions carefully and establish an effective budget plan to repay your payday loan.
• Continuous payment authority agreements or CPA – this enables the payday loan companies to charge a fee to your credit or debit card, whether you repay the loan or not.
• Endless cycle of debt – payday loans are notorious for leading its consumer into a bad cycle of debt. Only borrow what you can afford to ensure that you can easily repay it during the day of the repayment.
• Complicated loan contract – all payday loan companies will require you to submit a contract that drafts the overall amount of your loan. Examine it carefully to determine what exactly you need to pay.
Repayment Methods for Payday Loans
How you want to repay your payday loan will depend on the lending company. Below are three common methods of repayment.
• Post-dated check cashed on the day of your repayment period
• ACH withdrawal taken from your bank account
• Manual online payment through your bank account
Before you sign the contract, see to it that you completely understand the repayment terms of the loan. There are lending companies that will only give you the roll over or renewal fees on your due date, which means that you can prolong your loan term rather than repaying it off.
What Happens If I Default In Payment
When it comes to payday loan, issues with repayment is usually uncommon. However, what the lending company will and will not do to obtain the cash that you borrowed is still unclear. But, in the case that you default, the lending company will typically roll over your debt to a collection agency. Debt collectors take their job seriously and they are willing to do extreme measures to guarantee that you will repay what you borrowed, some of them will even illegally threaten you with time in prison. The lending company can also file a lawsuit for assets to repay for what you borrowed.
Frequently Asked Questions on Payday Loans
Can I apply for payday loan even if I don’t have a bank account?
Maybe. There are some lenders that don’t demand you to have an active bank account, instead they let you get the money personally.
Is it possible to roll over my payday loan?
There are different regulations for rollover loans and waiting periods for each state. If payday loan is considered legal in your state, your lending company might give you the chance the repay the fee to extend your repayment period. This is usually called as rolling over or renewing.
If I borrow from a payday loan, will it affect my credit?
Payday loan companies don’t submit your information to the primary credit reporting agencies – TransUnion, Experian, and Equifax. But, they might submit details about your repayments and loans to small-time credit reporting agencies. The major danger that you should be aware of is repayments. If you make late repayments, expect that this will add negative records on your credit report.
I’m on welfare, can I avail payday loan?
As long as you can afford to repay the loan, you might qualify even if you have government benefits.
How will I know that the lender I choose is trustworthy?
Research about the state licenses of the lender, contact information, and online reviews. If you can instantly determine how to contact a representative and look for its license to operate in your area, then that lending company might be trustworthy. However, you still need to be careful. There are scams that are notorious for mimicking the logo and website structure of many popular lending companies. Always check if the lender you select is legit before you submit any of your personal information online or through the phone.
The ACH authorization provides a lender permission to take out funds from your savings or bank account. You need to sign an ACH authorization unless your lender lets you repay the loan via check. However, before you sign anything, see to it that you are fully-aware of the exact amount that will be debited on your account and on what dates, whether it might be for renewal or repayment.
Why do lending companies ask information about my bank account?
Typically, lending companies will ask you to provide information about your bank account, like your routing number or account number, to determine where they can deposit your approved money, process the repayments, and verify if you have an active bank account.
Will a payday loan company have the ability to garnish my wages?
Only the payday loan company or debt collector can garnish your wages provided that it has given a court judgment. It can be due to failure of loan repayment and disputing the loan company or collector after the lawsuit has been failed against you.
What are the best online payday loans?
Financial problems are inevitable. From time to time, people experience problems with their cash flow and usually turn to short-term payday loan to make ends meet. During these struggling times, you might think that the best option that you can have is to take out a payday loan to help you get by until your next salary comes around. Since payday loans are forms of credit that don’t undergo credit check, they are popular among borrowers with bad credit. For those with unfavorable credit, they’ll think that the best option for their immediate financial needs is payday loans.
There are several advantages that you can get when you apply for payday loan – a short-term, emergency that can be repaid using your incoming salary. It is a convenient and fast option that works great even for those with weak credit score. There are also some payday loan lenders that offer the loan on the exact day of application. However, all of these advantages comes with an expensive cost – the towering repayment rates. Payday loans are only intended to be your last option. Make it a point to look for other financial alternatives before you decide to take out a payday loan.
In case of an urgent financial emergency, this article compiled the best and most reputable online payday loan lenders that you can apply for, even if you have a bad credit. To rate these payday loan providers, their speed in depositing the money to your bank account and the amount of interest rate they charge were taken into consideration.
Characteristics of the Best Online Payday Loans
The best online payday loan providers offer you the convenience to apply using your computer or phone. When you apply online, you can save money on transportation and avoid embarrassment of taking out payday loan in person. However, you just have to wait for at least two business days before you can get your approved funds from your bank account. If you badly needed cash right away, it is much better if you visit the physical location of the lending company.
Online payday loan providers offer the same requirements to providers with physical outlets. They will ask for your personal information and your routing number. Always remember that when the due date of the loan arrives, the lender will withdraw the exact amount that you borrowed from your bank account, which means that you are defenseless against overdraft fees.
Online payday lenders have similar application requirements to lenders with physical branches. You provide personal information and your bank’s routing number. Remember that once the loan comes due, the lender withdraws the funds you owe from your account, leaving you vulnerable to overdraft fees.
Moreover, the best online lenders follow all the state laws regarding payday loan terms, fees, and rollover restrictions. Before you can access your loan options with their corresponding rates and terms, most websites will require you to choose your state or key in your Zip code.
How can I get a $100 loan?
If you instantly need $100, a payday loan might be a plausible option for you – most especially if you have unfavorable credit. You can apply online or at a retail location. Once your application is approved, you can immediately get the money that you need. Here’s how you can obtain $100 from a payday loan:
• Look for a lender – you can use a comparison table to find out which lender in your state offers $100 worth of loan.
• Check the qualifications – many lenders will require you to have a stable income and bank account to borrow $100.
• Apply online or at a physical location – now that you’ve found the perfect lender, go to their website to get started or visit their physical location.
• Wait for the loan to be approved – your loan approval will be given shortly after you submit your application.
• Get your approved money – the money will be sent to your bank account on the next day if you applied online or on the same day, if you applied in-store.
Here are the qualifications if you want to get $100 worth of loan:
• At least 18 years of age
• Regular source of income
• Residence of an eligible state
Are payday loans fixed or variable?
Loans can either have variable or fixed interest rate. In general, fixed interest rate loans are the type of loans in which the interest rate stays the same for the entire lifespan of the loan. They do not change even if the market rate will fluctuate. On the other hand, variable interest rate loan is a type of loan of which the interest rate changes together with the fluctuations in the market. Basically, payday loans are fixed interest rate loans. They have a fixed repayment period, as well as fixed interest rate. Moreover, payday loan lenders do not ask for credit check, making way for borrowers with bad credit. Applying for payday loans will also not affect your credit score. They are advertised as an instant financial solution for emergency cash problems.
What’s the difference between a payday loan and a cash advance?
During times when you find yourself struggling with your finances, you might want to look for instant way to obtain cash to get by. One great option is to get a payday loan or credit card cash advance. Both of these financial scheme have at least one similar thing: you can utilize them to get immediate money. But before you apply for any of these two, it is essential that you understand the main differences between them.
• A payday loan is considered as a short-term loan that has uncomplicated application requirements and fast turnaround time. Borrowers can apply in-store or online.
• A cash advance is also a short-term loan that you take out via your credit card.
The Repayment Terms
• can hold debt for a long period of time
• increases interest instantly
• has a fixed repayment period
• increases interest rate instantly
Cash advance will usually begin increasing its interest right away. In short, there’s no grace period when it comes to the surging of interest. Similarly, payday loan also offers instant interest. The only difference between the two is their repayment timeframe. Cash advance can hold your debt for a long timeframe, while repayment period for payday loan is much shorter. In fact, some payday loan lenders require their borrowers to settle the loan in as early as their next payday.
The Interest Rates
• 24% average APR, additional charges not included
• 400% APR and up with finance fees
In cash advance, you have to settle the upfront fee – for instance, $10 or 5% of the money you take out. After that, you have to pay for the interest of your cash advance, which is typically around 24% APR.
In payday loan, the upfront fee that is charged to you is based on the amount of money that you borrow – usually around $15 to $30 for every $100 borrowed. Given that the repayment timeframe of a payday loan is about two weeks, this could result to an APR of at least 400% or higher. This creates a significant difference between payday loans and cash advances. Theoretically speaking, you can get a cash advance and pay it back the next day, resulting to a very minimal interest. On the other hand, no matter when you pay back a payday loan, you’ll still face a fixed amount of financial charges.
How Much Are The Fees To Be Paid
• $3 to $5 or $10 to $20 of the transaction
• $15 to $30 for every $100 borrowed
Since you are now well-acquainted with the differences between payday loan and cash advance. It’s essential to look at the downsides of both financial option. The major drawback is they are both extremely expensive. Payday loans have a reputation of trapping borrowers in a cycle of bad debt. Due to this, they need to take out multiple loans to settle the amount that they borrowed. The same way, cash advances are pretty costly, as well. Aside from its upfront fee, you also instantly begin accruing the interest on the money that you took out. With these downsides, payday loans and cash advances are specifically made to be used when you have no other financial options to turn to.