1: How many types of personal loans are there?
There are all sorts of different personal loans available to consumers. Each one can be categorized as secured or unsecured. Secured loans mean that the lender may use some of your personal property as collateral; for example, mortgages and auto loans are secured loans. If you default on your payments, your lender can repossess your house or car to make up for the money lost. Unsecured loans, like credit cards and payday loans, don’t require any collateral for the loan, although interest rates are usually higher.
2: Are payday loans available in my state?
It depends on where you live. 32 states regulate payday loans at a minimum, making it a quick and easy process. Six states have slightly stricter regulations while still allowing payday loans. There are 12 states, however, (plus the District of Columbia) that prohibit payday lending all together. Find out if payday loans are available in your state here.
3: How do I get the money?
You have several options when it comes to receiving your payday loan. If your lender has a local store, you can go and pick up your funds in person. Store lenders usually offer cash, checks, or prepaid debit cards. Many online lenders also offer same day wire transfers, although there is usually an extra fee charged for this service. If you have time before you need the money, you can also get a direct deposit that usually hits your account within a few business days.
4: What do I do if I miss a payment?
The first thing to do is notify your lender so they’re aware of the situation and don’t attempt to withdraw funds from your checking account. If they do and you don’t have the funds to cover the payment, you’ll likely be fined for having a check bounce. Instead, talk to your lender about signing up for an installment plan.
5: How long does the loan request process take?
Most lenders have speedy processes for loan requests, especially if you gather your application materials in advance. In fact, many payday loan companies boast same day approval.
6: What do I need to qualify for a payday loan?
Lenders typically require at least the following:
- A social security number
- At least 18 years old
- Proof of consistent income
- A checking account
- A phone number
7: How do I know that I’ve been approved for a loan?
If you apply in person, you’ll most likely receive approval while you’re at the store. For online applications, expect to be notified by either phone or email with the terms of your loan agreement.
8: Can I still get a loan if I have bad credit or a bankruptcy?
Yes, in fact, payday lenders do not run a full credit history report as part of the application process. They rely more heavily on having access to your checking account to ensure repayment when the loan comes due.
9: How can I tell if a payday lender is licensed to do business in my state?
Lenders should have a license number for each state in which they do business. You can find this information on their website or by calling customer service. You can also contact your state’s financial regulatory agency to confirm the lender’s information is accurate.
10: Can I pay back my loan before the due date?
This depends on your lender. Most lenders allow you to prepay if possible, but some do charge a prepayment fee. It’s best to double check with your payday loan company before making any early payments.
11: Is applying for a payday loan online safe?
Yes, as long as you are dealing with a reputable payday lender. To ensure the website is encrypted properly, make sure the web address starts with “https” rather than just “http.” The extra “s” indicates an additional level of security to protect your personal information.