If you’re out of cash and have a few days or a week between now and your next paycheck, you might be considering payday loans online. These fast cash loans can help you cover the cost of car repairs, daily expenses, and other short-term borrowing needs.
Fortunately, you can apply for payday loans online, thus eliminating the need to go to a bank or other local lender.
In this article, we will cover everything you need to know about online payday loans, as well as share some of the best options available online today.
Table of Contents
- 1 What are Payday Loans?
- 2 How Do Online Payday Loans Work?
- 3 Uses for Payday Loans
- 4 How to Find the Best Payday Loans Online
- 5 What to Watch Out For
- 6 Best Online Payday Loans
- 7 The Bottom Line
What are Payday Loans?
A payday loan is a short-term loan that typically comes with a high-interest rate. The idea is that you will use the cash in the loan to pay for things between now and your next payday, then pay it back in full when you receive your next paycheck.
All payday loans are different, but they do typically have a lot of similarities. Due to the short-term nature of these loans, they generally are expected to be paid back in full within two weeks. They also often only cover a small amount, typically a few hundred dollars or less. They also usually have exceedingly high-interest rates and charge administrative fees and service charges as well.
The lenders typically expect that payday loans are paid pack in a single payment, and some offer rollovers for those who can’t pay-in-full and on-time.
With payday loans, you can even get a loan with bad credit.
How Do Online Payday Loans Work?
Now that you understand what most payday loans have in common, you may be wondering exactly how they work. When you apply for an online payday loan, a representative of the company will typically call you and explain the terms of your loan. Then, they will request electronic access to your checking account.
You will have to authorize a hold on your checking account to receive an online payday loan. This helps the lender ensure that they will receive your paycheck in exchange for the loan.
Finally, you’ll sign off on the terms of your loan. Then, the lender will deposit the amount you borrowed into your bank account. You will have access to the money until you get paid. At that time, you will be expected to pay back the loan plus any fees and interest.
If you want to, you may also be able to roll the loan over to your next paycheck. However, during that time, your loan would collect interest and more fees. It is important to note that not all states will allow rollovers and that if you are already living paycheck to paycheck, it can be risky to continue incurring fees.
Uses for Payday Loans
People choose to take out payday loans for several reasons. Typically, they need enough cash to float them along until their next paycheck because they do not have enough money saved up to cover their expenses. However, some other reasons include:
- Emergencies – Medical care can be expensive and may be crippling if you have a medical emergency that isn’t covered by your insurance. To get quality care quickly, you may be expected to pay for your care upfront. If you do not have the money, then a payday loan might be your best option.
- Legal needs – Some legal needs arise quickly, leaving people with the need for quick cash. This may include posting bail.
- Car repairs – If you rely on your car to get to work, school, and other places that affect your financial situation, then a breakdown can be detrimental to your finances. Therefore, you might need to take out a payday loan to cover repairs, later pay it back when you receive your next paycheck.
- Utility bills – If you have bills that are past due, then you might need to take out a payday loan to ensure they do not get shut off before your next paycheck arrives.
- Creditor late fees – If you miss credit card payments and other payments, companies are likely to charge you hefty fees. You might be able to avoid or minimize these fees by taking out a payday loan.
How to Find the Best Payday Loans Online
When shopping for a payday loan, you should know what the best payday loan lenders have in common. Not only with this save you money, but you will have a more positive experience when you know what you are looking for.
APR, or annual percentage rating, is the interest that you will be charged on your loan. A higher interest rate can make or break your ability to repay the loan. You should look for a lender that offers low APR and always do the math before taking out a loan. As you shop around, be sure to compare the APR on each loan and understand what the total cost of the loan will be when you repay it.
Fees also contribute to making payday loans challenging to pay back. Some loans have origination fees, maintenance fees, and more. Be sure to understand all the fees that will be included in your loan and take them into account when you do the math on the total cost of your loan.
No Impact on Your Credit
A huge advantage of payday lenders is that they do not typically take your credit into account when deciding who to lend to. If you can’t get a loan from a bank or credit union due to having bad credit, a lender that does not check your credit might be a good option for you.
Quick Signups and Deposits
Most online payday loan lenders have quick signup and deposit process. This means that you could receive the cash you need today rather than going to the bank and waiting for loan approval. Some online lenders even offer instant deposit programs.
What to Watch Out For
If you are considering an online payday loan, it is also essential to understand the risk involved. If you can’t cover your expenses and promise your future paychecks to a lender, there is a chance that you won’t be able to repay the loan and fees. Even if you can, it will leave you with less money to use between when you repay the loan and your next paycheck.
Therefore, be sure that you understand what the loan will cost you once it is paid off, and how much money you are expecting to receive on your next paycheck. This will help you avoid the ‘revolving door’ of payday loans.
Best Online Payday Loans
Now that you understand how payday loans work, you can start shopping for the best online payday loan for you.
1. Instacash from MoneyLion
Instacash by MoneyLion is an easy way to receive money quickly. Simply download the Instacash app and apply for Instacash cash advances right away. You’ll be able to access your next paycheck early and with 0% APR. With MoneyLion, you can get up to $250 right away and pay $0 in fees if you use their automatic deposit feature.
LendUp will loan up to $255 and payout on the same day as a user applies. Their finance charge may reach up to $45, thus leaving borrowers to pay $300 after two weeks. They do not check your FICO credit score or make a hard credit inquiry. The company exists completely online, making online communication and applications a breeze.
3. Check Into Cash
This company has over 800 physical storefronts and offers online quotes and applications. The online applications are typically approved within the hour, and new users can borrow up to $750. Their fees and interest can equate to up to 400% APR.
LightStream offers same-day funding for payday loans and personal loans if your application is approved before 2:30 EST on a regular business day. This company offers no fees and even gives discounts if you enroll in autopay.
However, they require several years of credit history and require a minimum credit score of 660. The company will loan up to $100,000, but typically less for those opting to receive payday loans.
This lender is best for quick approvals as they typically approve loans within an hour of receiving online applications. While they offer a host of online resources, this lender is not available in all states. The company will typically lend between $100-3000 in single installments, depending on your income.
6. Check ‘n Go
This company is best known for its over 1,000 storefronts nationwide. It has modest interest rates compared to its competitors and allows users to apply for payday loans online. They are operational in 27 states and allow borrowers from 16 states to apply online. Users can borrow from $300 to $3000 from this lender.
7. Speedy Cash
This lender allows borrowers to take on $100-500 in loans at a time and offers lower repayment charges than some of the other lenders on this list. They have 200 storefronts in 14 states. Users should be aware that they do not have a BBB rating, but are rated 4.6/5 stars on Trust Pilot. They are also one of the older payday lenders available online and have been issuing payday loans since 1997.
The Bottom Line
Payday cash advances can be risky but are necessary for some to cover their expenses. Most people can get same-day cash deposits in their bank accounts and pay the loans back when they receive their next paycheck. Online payday loans do not typically require a good credit score and can help to float you along until you receive your next paycheck.