How do payday loans work online?

Quick Answer When getting a payday loan online, you start by completing an online application. If approved, the loan amount is deposited into your bank account. Repayment is usually required by your next payday, and the lender may automatically withdraw what you owe from your bank account.

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Kevin Johnson Answer updated on Jul 17, 2023

Fact checked by Dwayne Dumesle

Nowadays, you don't necessarily have to go into a brick and mortar store to apply for a payday loan. A lot of the time, you can do part — or even all — of the process online. 👨‍💻

The availability of online payday loans will depend on your state's laws (some states don't allow online payday loans) and whether your local lenders offer this option.

Learn: Where can I get a payday loan?

To get a payday loan online, you'll start by filling out an application form on the lender's website. These forms usually start by asking for basic information, like your name, email address, and state/ZIP code. In addition to that, you'll also typically need to provide:

  • Employment and income information
  • Bank account information
  • Valid ID (in part because you have to be at least 18 years old to get a payday loan)

After you submit your online application, the lender will review your information and then draw up a lending agreement with your loan offer, its cost and fees information, and its due date.

IMPORTANT: It's up to you to review and understand your loan agreement and, before you sign anything, make sure you'll be able to repay your loan in full so you don't get stuck having to renew your loan and enter into an inescapable loop of debt.

Learn: Can you get a payday loan without a job?

After your loan is approved and you sign your contract, the loan amount will be deposited into the bank account you provided as part of your application — usually in less than 24 hours — and you can then use that money however you wish!

Repayment is due at your next payday (in two weeks). For online payday loans, the lender will usually make an automatic withdrawal from your linked bank account. So, when your loan comes due, make sure you have enough money in your account to cover your repayment!

Learn: Can I get a payday loan without a checking account?

While online payday loans can be convenient, their high APR and automatic withdrawal of funds from your bank account tends to cause serious financial problems for borrowers. So, while you're at your computer, I urge you to look into lower cost options that also offer more flexibility like online installment loans, online title loans, or benefits programs to give yourself a better shot at a healthy financial future. 🎯😉

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