How Payday Loans Work
Have you ever wondered about Payday Loans – what they are, how they work, and if they’re something you should consider? If so, you’ve come to the right place!
Once you understand how these loans work, you might decide that a Payday Loan is a good option for getting the money you need for expenses.
What are Payday Loans?
Also known as a Cash Advance, a Payday Loan is a two- to four-week short-term loan due on your next payday. Since these are small-dollar personal loans, they can help bridge the gap between paychecks when unexpected expenses occur.
How do Payday Loans work?
The process for getting a Payday Loan is easy. Simply choose a reputable payday lender and complete your application online or in person. Most lenders will let you know within minutes if you’re approved. You may be able to receive your funds as soon as the same day you’re approved, but typically no later than the next banking business day.
How much money can I borrow with a Payday Loan?
The amount of money you can borrow with a Payday Loan depends on your state and how much you earn. Payday Loans typically range from $50 - $1,000. Once you enter your zip code or city and state, you can see which Payday Loan amounts are available in your area.
Is a Payday Loan right for me?
A Payday Loan can be a good financial option if you need a small loan quickly and you know you’ll be able to repay it in full on your next payday.
Do Payday Loans have high interest rates?
The Federal Truth in Lending Act (TILA) requires all financial institutions to report their loan fees as Annual Percentage Rates (APR). To comply with TILA, we report our Payday Loan fees as an implied APR. This means we report the amount of fees you would pay if you renewed your loan every two weeks for an entire year.
Since the typical Payday Loan term is just two to four weeks, you’ll likely pay far less than the percentage we report per TILA requirements. In reality, Payday Loan fees can be more reasonable than most people realize!
What fees are included with a Payday Loan?
The fees associated with a Payday Loan are specific to your state. In most states, you’ll only pay a flat fee based on the amount you borrow. The average fee for a Payday Loan is about $15 for every $100 borrowed.
This set fee, combined with the loan’s short term, can make a Payday Loan less expensive than missing a credit card payment, being late on a bill, or paying a utility reconnect fee.
At Advance America, our fees comply with all applicable state and federal laws. Visit or call your local Advance America to learn more. You can also view our Payday Loan rates and fees online.
Can I get a Payday Loan if I have a bad credit score?
Here’s more good news – you don’t need a good credit report to be approved for a Payday Loan. Payday lenders like Advance America look at other factors besides credit score.
For instance, we consider your employment status, the amount of money you earn, and your current debts when deciding whether to approve you for a loan. So, even if your credit isn’t great, you could still be approved.
How can I find a Payday Loan lender I can trust?
The best way to ensure you choose a payday lending company you can trust is by doing your research before making any commitments. Google ratings and customer reviews will let you know about other borrowers’ experiences with payday lenders. If a lender has an overwhelming number of reviews written by satisfied customers, it’s a good sign!
For over 25 years, Advance America has been a trusted lender serving hardworking consumers. We have over 200,000 reviews on Google and an overall 4.8- star rating on Trustpilot. Our personal loans, including Payday Loans, can provide you with the money you need to cover all sorts of expenses.
How soon can I get my Payday Loan funds?
How quickly you’ll receive your money depends on the lender. Some lenders will transfer funds immediately or within a few minutes. Other lenders may have a daily cutoff time for transferring money. If you miss that cutoff time, you may need to wait until the next day.
Every lender is different, so make sure you ask about their policy for releasing funds early in the application process so you know what timeframe to expect.
What do I need to apply for an online Payday Loan?
Unlike other types of personal loans, Payday Loan application requirements are fairly minimal. To apply, you’ll typically need to provide a government-issued ID, proof of income, and your checking account information.
How do I apply for a Payday Loan online?
Applying is quick and convenient! You can apply online from the comfort of your home in just a few easy steps:
- Fill out our online Payday Loan application.
- Review your application carefully, as any missing or incorrect information could mean delays in your application process.
- Submit your application and wait for your approval decision.
- Review your loan offer. Be sure to read the loan terms and fees, provide ACH authorization for payment, and electronically sign the agreement.
- Receive your Payday Loan funds. Depending on what time your loan was approved, the money could be deposited into your checking account as soon as the same day.
- Prepare for repayment. Remember, your payment amount will be automatically withdrawn from your account on your previously agreed-upon due date.
How do I apply for a Payday Loan in person?
If you prefer, you can also stop by a lender to apply in person.
- Bring your ID, proof of income, and bank statement to your local Advance America store. In some states, you may also need a personal voided check.
- Fill out the application and check for any mistakes or missing information. One of our team members will be happy to assist you.
- Turn in the application and find out if you’ve been approved.
- If you’re approved, read the loan's terms and fees, sign the agreement, and set up your repayment arrangements.
- Receive your loan funds as soon as the same day or on the next banking business day.
- Repay your loan. Depending on your agreement, you may either return to the Advance America location to pay on the loan’s due date or have your payment automatically debited from your checking account.
Apply for your Payday Loan from Advance America today
Advance America offers practical money solutions when you need them most. Best of all, you don’t need good credit to be approved. Applying online is convenient and easy, and you’ll know within minutes if you’ve been approved.
Visit us today to start your Payday Loan application!
Notice: Information provided in this article is for informational purposes only. Consult your attorney or financial advisor about your financial circumstances.
About the author
Bree Ewers is a senior editor, copywriter, and content writer whose work has been featured across the media, small business, and financial industries. She operates Nomad Freelance Content from her home office in Portland, Oregon.