This payday loan guide contains:

• Background on payday loans
• Features to look for in payday loans
• How to select the best payday loan for you

This independent guide was created to help you understand the basics of payday loans and to help you choose the right payday loan for you. We do not provide any payday loans ourselves, so you can be confident that all of the information in this guide is independent and unbiased.

Background on payday loans

If you ever find yourself in a 'cash crunch' and could avoid significant problems with some quick cash, a payday loan might be for you. Payday loans are very short-term loans (a few days to a month or so) that generally give you anywhere from a hundred to a thousand dollars within a day or so of submitting your application. This money is typically deposited directly into your checking account, and is paid back within a certain timeframe, which typically would correspond to the receipt of your next paycheck (hence the term 'payday loan'- a loan until your next payday).

Important features to look for in payday loan companies

There are several companies that offer payday loans online, and the minimum qualifications to get a payday loan are fairly standard across the industry. Generally, you need to be 18 years old, you must have lived in your current residence for at least three months, you must have had your current job for at least three months, you must have had a checking or savings account open for at least three months, and you must deposit $750-$1,000 into your account every month. Credit reports are generally not pulled for payday loan qualification, but most if not all of the information that is submitted on the application will be verified.

Once you have completed and submitted the application to the payday loan company, they will process the application by reviewing copies of your bank statements and by contacting your landlord and place of employment. After they have verified your information to be true and accurate, they will process an electronic deposit of the requested funds to your checking or savings account. Depending on the banking cutoff times, your loan will probably be available the next business day. You are then able to use this money for whatever purpose you intended.

When the payday loan becomes due based on the terms of your loan, the lender will automatically withdraw the loan amount, plus the interest and any applicable fees, from your bank account. Most payday loan companies will require payment of the entire loan amount, and some payday loan companies allow you to repay the loan over a short period of time. For those companies that give you a choice, you can either pay the interest only or the interest plus a payment of the borrowed amount. Usually, there are procedures to go through if you do not want the entire loan to be paid back, which require you to provide notice to the payday loan company several days in advance of the payment date. If you do choose to extend the loan, there will be additional costs that will be incurred, and there will be a limit as to how long the payday loan can be extended (4 pay cycles, for example).

How to select the best payday loan service for you

Although payday loans can be a good way to get much-needed cash for a very short period of time, the cost of borrowing in a payday loan is VERY high- it can be upwards of 400-700% on an annual basis! This is 20-30+ times the cost of even the highest-interest rate credit card, so payday loans should be taken out only when the cost of the loan is less than the consequences of NOT getting the payday loan. That being said, most payday loan companies operate generally the same way. In addition to the above considerations, be sure to compare not only the interest rate, but also the entire fee structure. Find out if there are any hidden charges for extending the loan, for returned checks or any other hidden fees. Once you have found the payday loan that's right for you, commit to making some improvements to your financial situation so that you minimize your need to take out additional payday loans.

In conclusion, we hope you have found the information we have put together on this site useful. We understand that this guide was in no way exhaustive, and that there is more to payday loans than what is included here. We suggest that you use the information in this guide as a beginning point in your search for the right payday loan for you.