A payday loan is a type of short-term loan that gets its nickname from the fact that repayment is usually due by your next payday (or 2-4 weeks).
Unlike other loans that let you pay back the money through a series of smaller monthly payments, with a payday loan you need to pay back the entire loan, in one lump-sum, on its due date.
Learn: What happens if you don't pay back a payday loan?
Payday loans are usually used to cover emergency expenses, like when you need a little extra cash to help cover your rent or find yourself dealing with an unexpected auto repair problem.
Unlike most other types of loans, which usually require a credit check and have a lengthy approval process, you can typically get the cash you need with a payday loan on the same day you fill out your application — no credit check required. ✅
To qualify for a payday loan, you typically only need to provide a few pieces of information:
- Valid government-issued ID
- Social security number
- Proof of income (paystubs, bank statements, etc.)
- Bank account where you can receive your loan
After you're approved, you can expect to receive your payday loan in your account in just a few hours. Some lenders also offer the option to pick up your funds in-store or at a money transfer service location, and some select lenders even offer the option of a prepaid debit card (often for borrowers who don't have a bank account).
Learn: Can I get a payday loan without a bank account?
While payday loans can help you get cash fast, this doesn't mean they're a perfect solution for covering your immediate expenses. Payday loans often come with high interest and fees, with APRs sometimes as high as 400%!
The high cost of your payday loan can cause the amount of money you owe back to your lender to take off faster than you can repay it. 🚀 So, if you're not careful, you could find yourself trapped in a cycle of constantly renewing your payday loan and never getting out of debt.
Learn: How much is a payday loan?