Payday Loan Reviews FAQ

Frequently Asked Questions about Payday Loan Reviews

• What is a payday loan?
• What do I need to apply? How does a payday loan work?
• What if I don't have enough money in my checking account on payday?
• Can I take out loans from more than one lender?
• Are payday loan sites secure?
• Will a payday loan harm my credit?
• Why do payday loans get so much bad press?
• How did NextAdvisor review these payday loan lenders?

What is a payday loan?

A payday loan is a short-term loan designed to give borrowers a small amount of cash to be paid back on the next pay day.

What do I need to apply? How does a payday loan work?

Customers fill out an online form complete with name, social security number, proof of employment, and checking account information. After submitting the form, an offer is made. When a customer accepts an offer, he/she will receive the amount electronically deposited, usually the next business day. On the customer's next payday, the principal plus the fee will be automatically deducted from the customer's checking account.

What if I don't have enough money in my checking account on payday?

The lender is legally entitled to charge you an additional fee, no higher than $15.00 for a "bounced check." Your bank may also charge you fees for insufficient funds.

Can I take out loans from more than one lender?

You can, but we don't recommend it. Payday loans should only be used occasionally, if at all. Getting caught in a cycle of multiple loan payoffs is expensive. For example, customers may be tempted to borrow $100 and think nothing of a $17.50 fee, and then decide to take out a loan from a different payday loan provider to pay back the initial loan. By this time they will have spent $35.00 to borrow $100 twice.

Are payday loan sites secure?

It depends on the site. We have confidence in our top-rated sites, but recommend that users avoid doing business with payday loan lenders who operate off-shore, as the one-star lenders we reviewed do. We also recommend that users opt-out of any offers to have their information shared with other lenders or advertisers.

Will a payday loan harm my credit?

An ordinary payday loan will not be reflected on your credit. Payday loan companies do not check your credit when you apply. Late or unfulfilled payments may have a negative impact, however.

Why do payday loans get so much bad press?

Compared to other forms of debt, the APR is high. Also, many consumers take out multiple loans, meaning they start to accrue a large amount of fees. This is particularly true in states where refinancing is legal. However, since other forms of debt aren't available to everyone, occasional, responsible borrowing with a reputable company is ok. After all, the fees are typically less than bounced-check fees or late fees from credit card companies. It's important for customers to be realistic about their finances. If you're continuously taking out payday loans to cover bills, you should consider credit counseling.

How did NextAdvisor review these payday loan lenders?

We looked at each lender's website and looked for essential information such as availability of contact information, and we looked at how clearly the terms were spelled out and whether they were within the law as we understand it. We researched each lender's Better Business Bureau score to get an idea of their customer service practices. While we believe we've been thorough, we always recommend potential customers read all the fine print carefully before engaging with any financial service.