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Which is the Best Online Payday Loan?
We’ve looked at several payday loan providers, but if you asked us to choose just one, we’d go with Money Mutual. This is by far the best online payday loan marketplace we could find. Over two million people have already used the service to connect to loan providers, with thousands more helped each day Ipass also direct installment lender.
The online form is easy enough to fill out. It’ll take little more than five minutes. Once the information is sent to the network of lenders, you’ll get a loan offer within minutes. If you accept the offer and move forward with the loan, the money is in your account within 24 hours.
Like other brands we’ve looked at today, Money Mutual doesn’t lend people money directly. Instead, it works as a lender network to connect lenders with customers. You’ll receive a loan offer, complete with terms and conditions, from the actual lender. These terms include the interest rate, finance charges, and repayment dates. Whether you accept the loan offer or not is up to you.
If you don’t accept the offer, you can try again and submit the form to see if there are other lenders on Money Mutual willing to work with you.
What Is a Payday Loan?
A payday loan is a short-term loan that can be used to fund your immediate expenses. It is typically taken out with the intention of paying the loan back as soon as you get paid. If you need cash, but don’t have access to a bank account or credit card, a payday loan can be a quick and easy option.
Payday loans can come from a variety of different sources. Traditional payday lenders, long-term financing providers, online lenders, and even traditional financial services companies have all been known to offer these products. This is one of the top reasons for the existence of online payday loans.
A payday loan comes with a variety of terms and conditions that vary from lender to lender. Terms may include the amount you need to repay each time you get paid, the interest rate charged on your loan, and how much you will pay in finance charges. Depending on your situation, these fees may be very difficult or impossible to cover without taking out a payday loan (or several).
There are different types of payday loans, like direct payday loans and online payday loans, that may come with different benefits. Payday lenders typically offer these products with terms between two weeks and two months, although some credit card providers offer longer-term solutions.
A payday loan or personal loan is a great way to get through an emergency and get back on the right financial track. The top payday lenders make it easy to find a lender who can help you out of a tough spot with reasonable terms and costs.
No matter what type of finances you’re struggling with, there’s probably a payday loan or personal loan solution for you. This list of lenders is just a start in your search for one that will fit your needs and be able to give you the quick cash you need when you need it most.
How Do I Apply for a Payday Loan Online?
If you’re ready to apply for a new or second payday loan, there are several things you can do to make the process easier on yourself. Apply only when it is necessary.
Before applying for your first payday loan, make sure you will be able to pay it back as soon as possible. Next, write down all of the expenses that need funding before taking out another credit product. This can help you narrow down your search for the best payday loan.
After taking out a loan, never skip an installment or default on one. Taking out another credit product to pay off the first one is a bad idea because it could lead to even deeper debt.
Can I Find a Genuine Online Payday Loan?
Rest assured you can find a genuine and legitimate payday loan online. Every lending network we’ve looked at today is real and works with real lenders to deliver legitimate payday loans online.
There are some things that separate legitimate lenders. These lenders must have a license to operate and lend money in your state. Not all lender networks operate in all states, so be sure to check the fine print and see if the network can help you.
For example, Money Mutual doesn’t operate in New York due to state restrictions on interest rates.
If you aren’t sure whether a payday lender network is legitimate and can legally operate in your state, get in touch with the attorney general office for your state to learn more. Some companies establish themselves on tribal land or even offshore to skirt state laws.
You should never do business with a lender or network that doesn’t have a legitimate license to operate. These companies likely don’t follow consumer laws designed to protect you and typically have high interest rates or unfair penalties you can’t afford.
What Type of Loan is Easiest to Obtain?
Generally, the smaller the loan you request the more likely you are to get approved for it. Borrowing only a small amount of money puts less risk on the lender compared to a large loan. Lenders also consider your credit history and credit score when deciding to approve a loan or not. A low credit score generally means having to pay higher interest rates than someone with a good one. For example, someone with a bad credit rating between 300 and 579 could pay up to 32% APR while someone with an excellent rating of between 760 and 850 only has to pay 10-12% APR.
Almost every lending network we’ve looked at today has low minimum amounts for cash advance loans, often as low as $250. You shouldn’t have much trouble, if any, getting approved for a loan that small even if you have a bad credit rating. The most basic requirements are making at least $1,000 per month and having been working at your job for at least 90 days.
If you’re looking to borrow more than a few hundred dollars, you’ll typically have to demonstrate a little bit more. Lenders will consider your credit history and your employment history before approving a loan of greater amounts. This can include evidence of a certain amount of assets owned or income generated from a job. These documents may include a bank statement, pay stubs, tax forms, and other similar documents that demonstrate your financial stability.
If there are any questions about the reliability of the lender or your application, see if they will work with you to find solutions. Payday loans are always available for short-term funding needs so don’t let one setback put an entire loan project in jeopardy.
Can I Find a Loan with a Credit Score of 450?
A credit score of 450 is low, but the good news is you could still find a loan with that credit score. The downside is that you’ll likely pay a higher interest rate than you would if you had a better credit score or better credit history.
Most people have a credit score between 300 and 850. A score between 300 and 550 is considered very poor, leading to the highest interest rates. A score of 450 is far below the national average for American credit scores.
Roughly 277% of people with a score of 450 have credit histories involving going 39 days or more past due on at least one payment in the past ten years. People with this credit score also have an average utilization rate of 127.9%, meaning they are using 29% more than their spending limit with credit cards and other credit lines. You need to keep your credit utilization below 30% to maintain a healthy credit score.
You shouldn’t feel like you can’t get a loan because you have a high debt ratio or a low credit score. You should still find someone willing to offer you a cash advance loan. Most loans require a steady income stream more than anything else. If you are making at least $800 – $1,000 per month, you’ll find someone willing to lend you money.
Where the money comes from might not even be an issue. It could come from gainful employment, Social Security, disability, a pension, or other benefits. What matters is you can prove your ability to repay the loan.
Finding the Best Payday Loan
By reading our guide, you should have some idea of what to look for in a lender or network. You don’t have to get stuck with a high interest rate for the sake of convenience.
We’ve made recommendations on different payday loan sources, but they are just that – recommendations. We can help you get started, but it’s up to you to pick the best option for your needs.
One of the biggest things you’ll see is an APR. APR stands for annual percentage rate. It’s a measurement of what you can expect to pay in interest on your loan over the course of a year, assuming no changes to how much you owe over that time.
For example, if you have an APR of 350% on an $800 cash advance, you will have paid $1,050 by the end of 12 months for this loan. The amount you owe will be $1,650 due to accumulated interest paid out over the life of the loan. This is just one example of how APRs work and how they can be misleading at times. Understanding how interest rates work is the first step in finding the best payday loan.
Are There Alternatives to Payday Loans?
We understand not everyone wants to deal with payday loans. Some of them have ridiculously high interest rates – so much so the Federal Trade Commission warns against taking them out. If you don’t pay the full amount back on time, you could roll over the loan and find yourself stuck in a never-ending cycle of debt. Late payments and missing payments also wreak havoc on your credit score.
Payday loans are unsecured loans, meaning you get them without offering collateral. These are small loans that are often due within a few weeks or within a month. The idea is you pay the loan back in full when you get your next paycheck.
You might need to give permission for an automatic withdrawal from your checking account to repay the loan. If you can’t pay back like this, you might want to consider getting an installment loan. Installment loans are paid back in monthly installments. These loans also tend to have fairer loan terms and interest rates compared to payday loans.
The online networks we’ve looked at today can help you choose from different lenders to get competitive interest rates and fair fees and timelines for repayment. They could make securing a payday loan more affordable for you because of this.
Never forget that you always have options. The easiest alternative to a payday loan is to ask friends or family members for money to cover your emergency. These loans are the least complicated – if you repay them on time and are confident you can do so. You should never borrow money from people without the means to pay them back. It won’t hurt your credit score, but it will damage your relationship, which is a lot more important. Put the loan into writing as much as possible and create a payment timeline that you and the other person agree to.
Another option is applying for a cash advance on a credit card. How much you can borrow depends on your available credit limit. You might find yourself unable to borrow more than 20% of your available limit, but that’s still better than nothing.
Keep in mind that the annual rate you pay for a cash advance is likely going to be much higher than credit purchases. You should attempt to repay the advance as quickly as possible to keep interest fees down.
If you haven’t got much credit left on your card because of how many purchases you’ve made, you might want to pursue a secured loan. These are loans secured against collateral, making them easier to get. A title loan, for example, involves using your car or home as collateral. Keep in mind that the collateral is forfeit if you fail to repay the loan. The lender takes your possessions and sells them to make their money back.
Do You Need a Bank Account to Get a Payday Loan?
Having a bank account is often the first and most basic requirement to qualify for a personal loan or payday loan. CashUSA.com states that borrowers must have a checking account to receive the money. The account is used to deposit the money from the loan provider, so you get access to it.
Other basic requirements for borrowing money include:
- Being at least 18 years old
- Being a legal citizen or permanent resident of the United States
- Earn at least $1,000 per month after taxes
- Provide home and work phone numbers
- Have a valid email address
Meeting those requirements isn’t a guarantee that you’ll find a lender or a loan, but they are the most basic requirements needed to get an unsecured loan without putting up collateral.
Some lenders might want you to have a checking account so they can automatically withdraw money from your account to pay back the loan. If there isn’t enough money in the account to make the payment, then contact the lender in advance. Ask them for an extension on the loan so you can pay them back a little late without it affecting your credit score.
You might still be able to get a loan even if you don’t have a checking account. The lender may allow you to use a savings account instead. Either way, the account will need some money in it so you can make the payments.
You can still find a payday loan even without a bank account. The loan money is issued in the form of a debit card, a check, or cash. Be sure to ask the lender what options they have if you don’t have a bank account but still need money. You also need to arrange how you’ll pay them back without a bank account.
Do Credit Unions Offer Short Term Loans?
If you are part of a federal credit union, you might qualify for a payday alternative loan, also known as a PAL. These loans allow you to borrow up to $2,000 and are designed to cost less than standard payday loans. You’ll pay back less money overall and have more time to do it.
Payday Alternative Loans follow rules set by the National Credit Union Administration. Those rules were updated in 2019 and now include:
- People have up to 12 months to repay PAL
- Federal credit union members can receive their loan instantly instead of having to wait a month
- Borrowers can only have one PAL out at a time
The interest rate for PAL loans is much lower than the average 391% APR on a payday loan. According to The Pew Charitable Trusts, the average payday borrower is in debt for up to a year and spends $520 to borrow $375.
A Payday Alternative Loan is meant to help people avoid small loans by helping them build and repair their credit records to open the doors for more traditional financial products.
Please note not every federal credit union offers PALs. Unions that don’t offer PALs may have a unique version of them instead. Many state-chartered credit unions also offer financial products like a PAL.
Federal law dictates that credit union loans that aren’t officially payday alternative loans have an interest rate under 18%. This is cheaper than your standard PAL, but a low interest rate typically brings higher application fees with it. The lender makes less money from the loan, so they charge you more to have it in the first place.
The Advantages of Borrowing a Payday Loan
Payday loans might not be the fairest financial products in the world, but they have some advantages that attract people to them. The main advantage is that you can get the money almost immediately when you need it. They are particularly helpful for emergencies.
What constitutes an emergency varies from person to person. For some, it means paying the electricity bill, so the power isn’t shut off. For others, it means making an auto loan payment, so their car isn’t repossessed.
Another benefit of using payday loans is that payday lenders have more relaxed lending criteria. You can often get approved for a payday loan even if you have bad credit. You’ll have your money within 24 hours if you get approved.
The Disadvantages of Borrowing a Payday Loan
Most people are aware of the main problem of using a payday loan – the high interest rates. Payday loans are typically a last resort for those with a bad credit score. Those people are considered a higher risk, which means that a high interest rate is the only way they can get approved.
Payday loans are infamous for having interest rates in the triple or quadruple digits. Interest rates are anywhere from 391% to 2,290%.
The other disadvantages of this type of loan are:
- Recurring Expenses – While payday loans are intended to be used for emergency expenses, and are advertised as such, the Pew Charitable Trusts reports that 7 in 10 borrowers use them to pay recurring expenses, such as utilities and rent.
- Inability to Make Monthly Payments – If you’re already having trouble meeting monthly expenses like rent and utilities, then borrowing a payday loan is only going to make that worse. The average borrow makes $30,000 per year, and 58% of them have trouble meeting monthly financial expenses.
- Money is Due Quickly – Payday loans have extremely short lending terms. These loans come due within a few weeks or one month. Online lenders have direct access to your checking account to ensure that they can collect the money before it goes towards anything else. Some of the lending networks listed above are fairer and allow you to repay a payday loan over months instead of weeks. These loans may also come with reduced interest rates.
- They are Unaffordable – Payday loans consume an average 38% of a borrower’s gross paycheck. Most people can only afford to pay 5% of their paycheck towards a loan while still meeting other basic living expenses.
- Loan Renewal – Roughly 80% of people who take out a payday loan take out another one within two weeks of paying them off. This creates a debt trap that is difficult to escape from. Remember, these loans are only for emergencies.
Find a Trusted Online Payday Loan Provider
Life comes with many expenses, but it’s often the unexpected ones that do the most damage. Emergency money borrowed from a payday lender can help you through hardships, so long as you can pay the money back on time and don’t use it for regular expenses.
The online lenders we’ve looked at today such as Money Mutual, Bad Credit Loans, etc. make for a great start in looking for a suitable payday loan with affordable terms and conditions. These loans are also easy to apply for and often have the money in your account within 24 hours.
One advantage of payday loans is that you can qualify for one even if you have bad credit. The downside is they have higher interest rates. It’s worth your time and money to pay the loan back on time to avoid paying even more.
With that said, if you ever need an emergency loan in a hurry, then payday loans are certainly a viable option worth considering.