Review of Payday Loans in the USA

Payday Loans Online

When you need a quick cash advance, consider the benefits of applying for payday loans online. A payday loan company lends cash to people who are in dire need of immediate funds. Keep in mind that the loan company secures the borrowed money against your next paycheck, so be sure to use the service cautiously and request an amount that you can repay fast. An online loan is convenient because the company will not require you to fax verification documents. Also, you will receive the funds quickly.

Requirements for Same Day Payday Loans

Payday loan lenders require borrowers to be at least 18 years old. Furthermore, you must have a consistent income source as well as direct paycheck deposit set up through your bank. Some lenders may not give you an advance unless your income is at least $1000 per month.

The Benefits of Online Loans

By applying for payday loans online at, you may be able to avoid a credit check. Therefore, a prior issue with your credit, such as a bankruptcy or excessive late payment history, may not affect you. Most lenders will transfer up to $1500 into your checking account overnight. If your checking account is close to zero and you’re facing the bank’s exorbitant bounced check, overdraft and nonsufficient funds fees, then you can take advantage of same day payday loans. With the borrowing option, you do not have to guarantee the funds with property items like your car or home.

The Downside

The main disadvantage to payday loans is that the interest rate is high. In fact, it may be around 25 percent. Therefore, if you borrow $100, then you may wind up paying $25 back to the lender. When you borrow a quick cash advance from a payday lender, be sure to pay it back quickly.

When to Consider a Payday Loan

You should not acquire a payday loan to take a vacation or enjoy a shopping spree, but if you need to pay for a car repair or rent, then consider the funding method. Payday loan lenders can be a lifeline when you’re struggling to stay financially afloat, but be sure to use their services wisely to avoid additional financial hardship.

Payday Loan Regulations in the USA

Payday loan regulations vary across the United States, because they are mostly regulated by the individual states.

Federal laws

The federal government does do some regulation of payday loans. For example, the Federal Trade Commission requires payday lenders to disclose the finance charge and what it works out to on an annual rate. For instance, if there is a $15 fee to borrow $100, then APR is 391 percent. The Consumer Financial Protection Bureau has responsibility for enforcing federal law and can levy fines and require lenders to reimburse customers.

The federal government also has specific rules regarding marketing payday loans to military members that require the APR to be 36 percent or lower. Lenders also cannot require a check or access to a bank account, and they can’t require binding arbitration for disputes over the loans.

State and local laws

Beyond federal regulation, many states and even some cities have their own laws about payday lending.

Georgia is the only state to specifically outlaw payday lending, but several other states make it virtually impossible due to their restrictions on the interest rate that can be charged on loans. Most of those states cap interest rates at 36 percent or less. More than one-third of the states regulate payday law interest rates or terms. This included nine states have put limits on the number of loans borrowers can have out at the same time.

In the other 32 states, payday lending is allowed with few caps on the practice. The states either have interest caps that are in the triple digits or they have no maximum rate cap at all.

Some cities are attempting to use zoning laws to regulate where payday lenders can locate and how close they can be to each other. Among cities using the strategy are Birmingham, Alabama, and several cities in Texas.