Frequently Asked Questions
What is an online payday loan?
A payday loan is an emergency loan ranging from $100 to $1000, which is issued on behalf of your salary check. It is usually offered until the next payday assuming that the borrower will return the loan amount by the designated date.
Often, borrowers write a post-dated check that includes the borrowed amount and fee of the lender. The check is redeemable by the lender if the borrower does not return to pay the loan amount at the end of maturity.
The APR or interest rate on a typical payday loan may seem higher than traditional loans, but the borrower only pays a small amount of cash as the loan is kept for a very short duration.
What are the requirements for a payday advance loan?
Most lenders have three basic requirements, which are:
• The borrower must be at least 18 years of age;
• The borrower should be employed or they must have a regular source of income;
• The borrower must have an active bank account.
To be eligible for the payday loan, lenders may evaluate the borrower based on past payday loan history, income, state of residence, and the status of direct deposit of salary into their bank account. Since payday loans do not usually involve credit checks, lenders still need to carry out risk evaluation to ensure the safe return of funds.
Since there is no strict selection criterion, each lender evaluates a borrower based on individual risk factors. After the application is accepted for a review, lenders will verify the data to ensure its accuracy. Each lender has a different set of criteria, which means that the application is approved only after positive verification.
Lenders verify the data by calling the borrower and respective institutions. Therefore, it is important that the borrower fills accurate and honest information on their application to ensure that the record matches the entry whenever the lender tries to verify it.
You can take simple actions to ensure quick approval such as giving your cell phone instead of a home phone number because it’s easier for lenders to get in touch on mobile numbers. Similarly, if you’re giving a telephone number of your employer, make sure that your employer understands the situation as it will help them answer relevant questions. Giving inaccurate information never helps the applicant because it cannot be verified.
How long do I have to pay back a payday loan?
Under normal loan terms, you will pay back your loan on your next pay date. It also means that most payday loans are short-term loans due in 30 days. Most lenders will allow you to extend your loan by paying a fee.
At the end of the period, you have different options on how you want to proceed. You can check these options by reviewing the lender loan documents after we’ve matched you with a potential lender.
Depending on the lender, you can:
• Pay the full loan amount;
• Renew the loan by paying the interest rate and a fee for extending the loan;
• Renew the loan by paying the interest rate and only a part of the principal amount.
Before making a final decision, make sure that your lender has a repayment option that can save you from defaulting on your promise.
How quickly can I get my money?
Unlike traditional loans, payday loans are deposited in your bank within 24 hours of approval. Some lender will also wire transfer the amount to your bank, when possible. If the loan is approved a day before the weekend or a holiday, you will get your loan deposited in the bank on Monday or the next business day.
What hours is your service open?
We are always available 24 hours, 7 days a week to serve our clients. You can submit your loan application, anytime you need a loan. However, it should be noticed that most lenders operate only on weekdays, which makes it difficult for our customer service representative to contact them about any issues on weekends.
Once the application is approved by the lender, you can also contact them on a priority basis to solve the issue efficiently. Nevertheless, we continue to support our clients by reaching out to lenders on your behalf, if necessary.
What are the consequences, if I fail to pay back the loan in the designated period?
Before transferring the loan amount to your bank, you will need to agree to terms and conditions of the lender. One of the most important terms of the approval is paying back the loan in time. If for any reason, you’re unable to pay, the lender will charge an additional fee on non-payment. Accordingly, it is important for the borrower to read loan terms of individual lenders before signing the documents.
If your lender does not offer any option to renew the loan, your obligations will be sent to a debt collection agency, which will try to resolve the issue, amicably. In fact, some lenders also share information with credit agencies, which can also negatively affect your credit score. Hence, it makes sense to study any loan renewal options offered lenders.
If you ever get late on payments, don’t forget to contact your lender directly before the end of the term. Don’t wait for the last moment to contact the lender because they may have already initiated an inquiry regarding your case. Fortunately, most lenders are willing to work with their clients; therefore, they may postpone the payment date to allow a borrower to pay the loan.
What code of practice Payday Lenders follow?
We strictly follow the Truth in Lending Act. Whenever applying for a loan using any of our websites, you can be sure that we will take every reasonable effort to provide full transparency, wherever possible. To make it easier for you to decide, we will clearly show interest rate, extra charges, terms of payment, and other important figures that will help you make a decision before applying for a loan using our loan portal.
Any lender who decides to choose our loan matching service to help our clients must adhere to strict criteria that must protect the identity and dignity of a borrower. As such, each lender must:
• Ensure that the personal information of the client is not shared with any third-party. In addition, the lender is solely responsible for safeguarding the information.
• Lenders will never market products to the client that are not related to the loan or that do not help the client.
• The lender is responsible for providing a direct phone number to the client, which can be accessed during the normal business hours. To resolve customer inquiries in an efficient manner, every query should be responded within two business days. The response of the customer service should be professional and courteous to the client.
• According to Truth in Lending Act, every lender must clearly state their terms and conditions without any marketing gimmicks. These terms must include loan charges, associated rates and penalties for non-payment of charges.
• Loan charges and miscellaneous rates must show:
– The loan amount that is offered to the client
– The total duration of the loan
– The payment frequency of the loan amount, if applicable
– Fees, interest rate, and renewal charges
• Subsequent details regarding the inability of the borrower to pay, missed payments and late payments must also be reflected in the terms and conditions, which include provisions such as:
– Abiding by the responsibility to collect payments as per the Local, State, and Federal laws
– Following pertinent laws on short-term loans as set by their respective jurisdictions
We take infringement on rights of clients very seriously. We not only keep an eye on irregularities but also work closely with our loan partners to facilitate our clients in a cordial and efficient manner. If the lender does not adhere to policies, we reserve the right to terminate the contract and take appropriate action to protect our client and our goodwill.
What is the APR rate for these payday loans?
The APR differs according to each lender; therefore, you will be able to see the exact rate and other terms after submitting the loan application. Remember, it is a no-obligation application form, which means that you don’t have to accept the APR if you don’t want to. If the APR is not acceptable, you can walk away without proceeding with your application – no questions asked.
Before perusing a loan, it is also important to check other terms and conditions. Sometimes, a high APR may suit you if it comes with generous refunding options or if it has special provisions for defaulters. Hence, comparing two loan providers on the basis of APR alone may not be the best decision.
Example of APR
APR of a typical payday loan can range from 260% to 1042% depending on the location of the borrower. While it may seem very high compared to traditional loans, the actual amount of interest that you pay is extremely less than the traditional loan due to the short-term nature of payday loans.
Following is an overview of the APR and related terms, as regulated by each individual State. These guidelines will help borrowers get a basic idea of payday loans offered in their locality.
A State-by-State Guide to Payday Loans
Each U.S. State has its own laws regarding the disbursement of payday loans. Some States prohibit such services, while others put special restrictions on fees. Here is a comprehensive overview of the laws in each State:
• Alabama restricts loans to a maximum of $500 with an interest cap of 17.5%. The duration of the loan can range from 10 to 31 days. The number of “rollover” periods is limited.
• Alaska restricts loans to a maximum of $500 with an interest cap of 15%. The duration of the loan is limited to 14 days, and lenders are discouraged from using aggressive collection methods.
• Arizona has enforced a total ban on a payday loan. In the past, it had laws that imposed 15% interest on borrowing.
• Arkansas does not offer payday loans. Previously, it allowed loans up to $400 with an interest cap of 10%.
• California restricts loans to a maximum of $300 with an interest cap of 15%. The duration of loan can’t exceed 31 days, while certain types of payday loans have an interest cap of 10%.
• Colorado allows its residents to borrow anywhere from $300 to $500 with an interest cap of 20% for loans less than $300. Loans of more than $300 are capped at 7.5%. The duration of the loan is limited to 40 days, and the borrower cannot take more than two payday loans at the same time.
• Connecticut has no rules or laws pertaining to payday loans. The industry is un-regulated; therefore, it is illegal to give such loans.
• Delaware restricts loans to a maximum of $500 without any cap for interest rates. The duration of loan can be up to 60 days.
• The District of Columbia does not allow lenders to give payday loans. Previously, the State had payday loan limits capped at $1000.
• Florida restricts loans to a maximum of $500 with an interest cap of 10%. In addition, lenders may charge a verification fee of $5. The maximum duration of the loan is 31 days.
• Georgia laws ban lenders from charging high interest rates on any borrowing that is less than $3000. Due to the nature of payday loans, lenders cannot operate effectively in Georgia.
• Hawaii restricts loans to a maximum of $600 with an interest cap of 16%. The duration of the loan is limited to 32 days.
• Idaho restricts loans to a maximum of $1000. There are no regulations on the interest rate, fees or the duration of loan.
• Illinois laws suggest that the monthly income of the borrower must be four times the loan amount. The interest rate is capped at 15.5%; whereas the duration of the loan can be anywhere from 13 days to 45 days.
• Indiana restricts loans to a maximum of $500; however, lenders can borrow as low as $50 with an interest cap of 10 to 15%. The minimum duration of payday loan is two weeks.
• Iowa restricts loans to a maximum of $500 with an interest cap of 15%. If the loan is rolled over, the lender is only allowed to charge 10% on additional funds.
• Kansas restricts loans to a maximum of $500 with an interest cap of 15%. The duration of the loan can range from 7 days to 30 days. Lenders are not allowed to garnish military wages, and no one can own three pay-day loans at any one time.
• Kentucky restricts loans to a maximum of $500 with an interest cap of 15%. The duration of loan can range from 14 days to 60 days.
• Louisiana restricts loans to a maximum of $300 with an interest cap of 16.75%. The duration of the loan can be up to 60 days. Lenders cannot charge a fee of more than $45.
• Maine does not have laws pertaining to payday loans, which means the resident of Maine cannot avail this facility.
• Maryland has strict lending laws, which are not conducive to lend payday loans.
• Massachusetts laws do not allow payday loans.
• Michigan restricts loans to a maximum of $600 with a tiered interest rate structure between 11% and 15%. The maximum duration of the loan is 30 days.
• Minnesota restricts loans to a maximum of $350 that can be borrowed for up to 30 days. The fee on loans that are less than $50 cannot exceed $5.50. There are several other restrictions on different amounts that can be borrowed.
• Mississippi restricts loans to a maximum of $400 with an interest rate cap of 18%. The maximum duration of the loan is 30 days.
• Missouri restricts loans to a maximum of $500 with an interest rate cap than can be up to 75% of the principal amount. The maximum duration of the loan is 31 days. Related fee charges can also be on a higher side.
• Montana restricts loans to a maximum of $500 with an interest cap of 36%. The duration of a loan can be up to 31 days. According to State law, residents cannot borrow a loan that exceeds four times their monthly income after tax.
• Nebraska restricts loans to a maximum of $500 with an interest cap of 15%. The duration of loan can’t be more than 31 days.
• Nevada is one of the most lenient U.S. States when it comes to payday loans. There are no specific terms, and a person can borrow up to 25 times of his or her monthly salary.
• New Hampshire restricts loans to a maximum of $500. The duration of the loan can range from 7 days to 30 days. Lenders cannot charge an additional fee on the interest rate.
• New Jersey does not regulate the payday industry nor does it allow anyone to sell such products.
• New Mexico restricts loans based on the income level of its residents. It has an interest cap of 15%. The maximum duration of the loan is 35 days.
• New York is very flexible with payday loans as it does not have strict regulations on the amount and duration of loans.
• North Carolina prohibits payday loans and related services.
• North Dakota restricts loans to a maximum of $500 with an interest cap of 20%. The duration of a loan must not exceed 60 days. Lenders can charge additional fee on various products.
• Ohio restricts loans to a maximum of $500 with an interest cap of 28%. The duration of the loan must not exceed 31 days.
• Oklahoma restricts loans to a maximum of $500 with an interest cap of 15%. The duration of a loan can range from 12 days to 45 days. In addition, lenders can only charge a maximum of 10% on loans that are less than $300.
• Oregon restricts loans based on the income level of the borrower. As such, the duration of loan can range from 31 days to 60 days. The origination fee must also not exceed $30.
• Pennsylvania does not offer payday loan facility to its residents.
• Rhode Island restricts loans to a maximum of $500 with an interest cap of 15%. The duration of a loan must be at least 13 days.
• South Dakota restricts loans to a maximum of $500. There is no limit on interest rates and miscellaneous fees.
• Tennessee restricts loans to a maximum of $500 with an interest cap of 15%. The maximum duration of the loan is 31 days.
• Texas applies an interest cap of 48% on payday loans. The maximum duration of the loan is 31 days, and lenders can also charge a monthly fee of $10.
• Utah is flexible regarding payday terms. It only puts restrictions on the number of rollovers.
• Vermont does not have any special restrictions on interest rates and loan amounts. Lenders are flexible to design their own terms.
• Virginia restricts loans to a maximum of $500 with an interest cap of 15%. The duration of the loan must be at least 7 days. Lenders can add penalties for late payment and impose verification fees.
• Washington restricts loans to a maximum of $700 with an interest cap of 15%. Lenders must not charge more than 10% interest rate on amounts exceeding $500. The maximum duration of the loan is 45 days, while income restrictions also apply towards loan.
• West Virginia does not have any special provisions on payday loans. Lenders can customize loan terms according to the client’s individual requirements.
• Wisconsin allows flexible loan terms, but the maximum amount of cumulative loan should not exceed $1,500. Accordingly, borrowers can take multiple loans.
• Wyoming restricts loans to only one month, which cannot be rolled over to the next month. The interest rate is capped at 20%; however, lenders are allowed to charge $30 on amounts that are less than $150.
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