A payday loan, also called a cash advance or a short-term loan, is one solution to an immediate financial problem. Many people occasionally suffer a cash emergency when their expenses come due before receiving their next paycheck. No one wants to default on a financial obligation, so the question becomes “who is willing to lend me money?” A short-term loan is generally funded quickly – within one or two business days – with the expectation that the borrower will repay the loan on the day they receive their next paycheck. Short-term loans can be found at physical stores in certain states or at online lender websites all over the country.
Typical Online Short-term Loans
Many lenders advertise short-term loans ranging from a modest $100 up to a tantalizing $1,500. A typical realistic loan amount for a first-time borrower is $300-$500. Requesting a lower loan amount will make it easier for a first-time borrower to find funding online. As a general rule, you should request the lowest amount that you need immediately, and you should make every attempt to pay back your loan as quickly as possible. Both the speed at which online short-term loans are processed and the chance that lenders take by approving high risk borrowers tend to add up to higher than average finance fees charged.
Payday Loans are used for a variety of expenses:
- To pay for an emergency auto or home repair.
- To pay for a medical bill or related expense.
- To pay for an unexpected monthly expense, such as an unusually large phone bill.
- To prevent checking or savings accounts from being overdrawn and to avoid high bank NSF fees.
- To cover a check you’ve written, but don’t have the funds for; avoiding multiple bounced check fees.
For more in-depth payday loan information, see the Topics below for the most Frequently Asked Questions about payday loans.