How Do Payday Loans Really Work? This isWhat You Need to Know

How Do Payday Loans Really Work? This is What You Need to Know

How Do Payday Loans Really Work? This is What You Need to Know

There are approximately 23,000 payday loan lenders across the United States. These unique loans offer borrowers immediate relief from impending bills.

If you’re facing an emergency bill or sudden creditor and don’t have the cash on hand to pay, then a payday loan may provide you with a solution.

Read this guide and learn about how payday loans work.

How Do Payday Loans Work?

How a payday loan works will depend on the state that you live in. Each state has its own laws and regulations for these types of loans.

Some limit how much you can borrow. Others limit the interest rate for your loan. Then others prohibit this type of loan altogether.

To obtain a payday loan, you’ll either go to a physical location or apply online. You’ll fill out an application, provide ID, and show proof of income. Once approved, you’ll be given either cash or a check.

You need to pay the loan and finance charges back by the due date. Most due dates are 14 days from the day you take out the loan.

How Much Can You Borrow?

Most people get approved for $350. But the exact amount you get approved for can vary from $50 to $1,000. The amount you get approved for will depend on the state you live in and your regular paycheck amount.

If you’re curious how much you’d get approved for, contact a payday lender such as Captain Cash.

What Are the Costs Associated?

You’ll have to pay a fee when you take out your loan. The state law will dictate what that fee is. It ranges from $10 to $30 for every $100 that you borrow. The lender must disclose the interest rate before you agree to take out the loan.

How Do You Repay the Loan?

You need to repay the loan by the lender given due date. Most people do this with one lump sum payment from their next paycheck. Check the specific terms of your loan because your lender may have different options.

  • Another form of credit
  • A check on payday
  • A postdated check
  • Direct debit from a checking account
  • Through an online portal

If you don’t make your payment by the due date, the lender may take the money out of your account.

What’s a Rollover Loan?

If you find yourself unable to pay for your loan when it’s due, you could consider a rollover loan. You can roll your current loan over into a new loan. That way, you pay the fees for the new loan now, and the total balance is due later.

While this option lets you get more time to repay your loan, it also makes the entire debt larger as it racks up more fees.

Consider Payday Loans

If you find yourself facing an emergency bill that you can’t afford, then payday loans may be the answer. These quick and easy loans are for two weeks and allow you to borrow against your future paycheck.

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