About100DayLoans.com

Life isn’t easy always. We have health concerns, family issues, emotional tussles, and the ever-increasing stress at the workplace and trying to meet the expectations of everyone. But the top slot certainly goes to – financial troubles.

Sure enough, money isn’t everything. We agree. But then, having good money will make life that much easier. That’s one trouble scratched off from your list. Cash in hand or cash at bank gives us the confidence to take-on many other challenges. When you have the money you need, you know that you can pay the bills on time, buy medicines when you need to, go out for an occasional dinner or drink with friends, and do those necessary home or car repairs when needed.

But sadly, almost all of us face financial constraints from time to time. So life is never quite smooth as we like it to be. What we need in these times is quick relief – a loan that is issued quickly for the short-term to help us ride over these temporary financial constraints. But most conventional lenders including banks will take a long time to issue the money. There is also a lot of paperwork involved. Here is where we come in.

What Happens to Those with Poor Credit Record?

You will find it difficult to get a loan if you have poor credit record. No bank or lending agency will give you the money because of your poor credit record. Credit rating agencies are known to maintain records for up to 7 years. So if you had missed or delayed making payments before, then you can be sure that it’s gone into your credit history.

It’s ironical that those with the most need for money won’t get the loan they need. Their applications are just going to get rejected.

But there is hope yet. That is in the form of small dollar loans, which are also referred to as “payday loans”. As the name suggests, these are loans of small amounts to see you through till the next payday. It’s just perfect to solve temporary financial hardships.

Law makers in our country are actually divided on this issue. Some favor these loans as it helps the needy get the cash they need, while some think these loans come at a very high cost so it should be banned. A lot has been written on this. Some states in US have actually made payday loans illegal. Unfortunately there are many instances in these states where we have found that people borrow money from loan sharks. These people give loans at even higher rates than normal payday loans.

Clearly making payday loans illegal isn’t helping the cause – in fact aggravating the situation. (At least this is what we are learning from our own network of lenders all across the USA.)

Therefore payday loans are not that bad as people make them out to be. If done right, they can help many families solve small financial issues of their lives without bothering from where cash will come.

Here we highlight some unique features of our payday loans. Read to know how they can be of great help to you if you need cash urgently.

Unique Features of Our Payday Loans:

These are small amount cash advances made for the short-term. (Please do not take them for a long period. Usually we lend for 30 days or less – please return the money + fees on time to avoid paying a late fee. Our fees are much less compared to the current market prices and we are sure you will be able to afford our loan. If you find the terms of our loan not affordable please do not accept the terms – we will not offer you a loan in that case. There is no fee to be paid if you reject our offer. You are then free to try other loan programs.)

Typically the advance is made till the next pay day, and this is why they are referred to as payday loans.
There is no paperwork, and so the amount can be forwarded to you without any hassles. You may not even have to visit the lender’s office in some instances. You can apply for the loan from your home by filling out a short form or over the telephone. Yes, it is that easy.

NOTE: If you want to apply by phone – our call center number. It can be easily found in this website. Its a toll free number. We are not writing it here because it may change and we may not be able to figure all places in our site. So please call the number that you are seeing in our application page. But we highly recommend to try filing the application. Its fast and free and will not take more than 5 minutes to apply.
No credit check is carried out, which means that a lot of time can be saved in loan processing. Even those with a poor or average credit score can get the loan they want. In fact, you could apply for the loan today, and get it deposited directly to your bank account in 24 hours. That’s great news because in an emergency you need the cash quickly. We may use our internal processes to check your credit – however it has nothing to do with your credit record – its just our internal process to check your ability to payback the loan.

The lender will just charge you a fee and interest. The extra money you have to pay back is always minimal as the amount you borrow isn’t that much. Remember, these are small dollar loans, or advances up to a few hundred dollars. Usually, the loan amount is between $100 and $1,000.

You have to pay back the loan amount, interest and fees after the next pay day to the lender who paid you. Most of the time its done automatically. If it does not happen please do not send us any payments. Please call your lender immediately. He is the one you should be paying your loan back. We will refund any payments made to us. We act between you and the lender as a broker. We charge our lenders if a loan is approved. That’s it – there is no extra cost on you if you use our loan application. In some instances, you can ask for an extension of the term if you cannot repay on the decided time. Some lenders will even allow part repayment if you aren’t able to pay back the entire amount. Can anything be simpler or easier?

NOTE: If you have taken a loan from us you will get email and phone number of your lender. In case you cannot pay the loan back on time we request you to please contact your lender and tell them your situation. If you contact us the whole process could take a lot of time and you may have to pay a penalty. So please contact them as soon as possible if there is a delay in payment from your end.

Who Is Eligible For Our Payday Loans?

Here’s the best part – almost everybody qualifies for these loans. There are just some simple conditions:

You must be 18 years of age, and should have a valid checking account. And secondly, you should be able to show that you have a regular source of income. That is it.

There is really nothing to worry about in these loans, or about the lenders offering these cash advances. The finance industry regulates small dollar loan companies strictly. All of our valid payday loan direct lenders have a Consumer Credit License number or in other words a business license.

How to Get Your Payday Loan:

To get your payday loan please apply here. Its an online application. 100% secured and confidential.

As mentioned before, its a short form where you must provide some simple information that is required for loan processing and approval. You have to provide information like your name, contact number, address, employment, monthly income, and date of the next pay day. Of course, you must also include the amount you need to borrow. Don’t forget to furnish the details of your bank account. Some documents will be asked from you, which you must fax to the lender.

Please do not worry about your personal and financial details as we have a strict privacy policy. Now days laws are so strict that we can be out of business if we do not adhere to even a single law of privacy online. We love our business so we are very strict with the information you provide us. It will only be shared with lenders near your area so that they can decide whether they can offer you a loan or not. Without sharing this information with them its almost impossible to give you a loan. All lenders in our network follow strict laws of lending and they too keep your information confidential.

The processing begins almost as soon as you have filled out the form and faxed the documents. You can expect to hear back from your lender within minutes. You will get an email to the address you provided about the decision. The application is always approved online if you have provided all the required information.

But remember one thing – the amount you are asking for has a huge bearing on whether the application is approved or rejected. The lending agency will compare this with your monthly income and see whether you can repay back comfortably or not. Don’t ask for too much, as these are small dollar loans. Only borrow what’s needed – the minimum amount to see you through an emergency. This way, you will also end up paying less towards the interest.

In some cases our lenders will offer you a loan that is less than the amount you asked for. Please do not mail us to increase the amount. Its up to the lender to decide how much they can offer you as loan – because its our lenders who are taking a risk by lending you. We are not taking any risk. So the amount they can lend entirely depends on them.

Loan Agreement:

You will also receive the loan agreement where all the details will be clearly mentioned, like the repayment date, interest percentage, and of course the loan amount. It should also include conditions such as whether you can repay before time, what happens if you cannot repay on the due date, whether you can cancel the loan, and such others.

Read this document closely. You are ready to proceed if everything seems good to you. Next, you must sign online. Provide your name. There will also be a security question like for instance, your mom’s maiden name. Email it back to the provider, and you are through with all the formalities.

Your loan is approved immediately, and the money is deposited to your bank account directly. The entire process is over in less than 24 hours. In case the lender asks you to FAX certain documents, please do that as soon as possible. Once you do, the loan will be approved.

That is how you can get a payday loan sitting at home. See how easy it is? This is the quickest and the most hassle-free way of solving immediate financial worries.

Apply For A Loan Now!

Before reading this article please understand that payday loans are very high interest rate loans. However that is not the end or beginning of any debate. Whenever you take a payday loan lenders will tell you exactly how much you need to return on the day your loan is due – and exactly that should be your concern. Nothing else. Period. We agree that knowing the interest rate is also important, but far more is the exact amount you will need to shell out to get a payday loan. If you can stick to paying back the loan in time, no law or lender on earth can harass you to pay a dime extra.

If you are comfortable paying back a loan, you should go ahead and take the loan and not bother about the APR that it may throw. What is far more important is that how much this loan can help you to avoid the mess that you may have in your life if you don’t get access to this cash. If you think the fee you payback to the lender is “costlier” than the mess that you may have to face without this cash – you are better off not taking the loan. But if you think the 10 or 20 dollars extra you pay per hundred dollars is worth to avoid a bigger mess – you should go ahead and take the loan irrespective of the annual percentage rate.

However to create a kind of resistance for consumers applying a payday loan and to take informed decision most government in countries where payday loans are legal like Australia, UK and USA have introduced mandatory rules regarding the disclosure of payday loans interest rates. If the lender owns a website and does business through it – at least in the UK and Australia it is mandatory that they mention the APR of their loans in their website.

That is the reason why you will see representative APR disclosed in almost every payday loan website in the UK and Australia.

USA is different though. It is not compulsory to disclose the APR in the website, but an agreement where the rates will be mentioned is compulsory. So if you take a payday loan your lender should tell you the APR.

We have also seen that recently most honest lenders in the US too have started disclosing the APR in their websites. Again this is not mandatory by US financial laws, but the lenders whom we work with do mention it on their websites.

Lenders who are registered members of OLA – Online Lenders Alliance – have to disclose the APR on their websites. We are members of OLA too and thus we mention the rates of loan in our application page. Good news is that 85% of the payday lenders in the US are members of OLA. So you should see the APR mentioned in most US websites as well.

For example if you apply a loan through our application your rates may vary by state, applicant’s information and lenders. For example a $100.00 loan for 14 days could cost $25.00 in fees with an APR of 651.79%. The total amount to payback could be $125.00. This is on the higher side – most lenders who work with us offer much competitive rates.

Some search engines have made it mandatory as well. If the lenders want to advertise their business in Google they will have to mention the APR (annual percentage rate) on their websites or its highly likely that Google will not allow such website to advertise in their Adwords advertising platform.

Here is the link where the above is mentioned:

https://support.google.com/adwordspolicy/answer/2464998?hl=en

Also, most lawmakers are of the view that when mortgage lenders, car loan lenders and credit card issuers mention APRs on their loans, payday lenders should also do the same. So what do you do if your lender has not told you about the APR (though that is not legal)? Note that some lenders do not disclose the APR in their terms that they ask you to sign. Maybe they don’t know the laws or they do not want to. Since most people who take loan are least bothered to know the APR – they do not complain about this to the authorities. Some people who do ask are told the APR.

Here we have explained in simple mathematics how you can calculate the APR on your loan. It will help you if you are interested.

When you get a payday loan you should know these three things:

1. Total amount financed. Lets say for example Mr. X gets a loan for $300. (Original amount borrowed).
2. Total finance fee charged by lender. For example if the loan was financed for a fee of $10 per $100 borrowed – the total fee comes to 300/100 = 3*$10 = $30. (i.e. the borrower needs to return 300+30 = $330 to the lender on the due date).
3. Loan financed for how many days. Lets assume Mr. X got the loan for 14 days.

Now lets calculate the APR on this loan.

Step 1: Divide the (Total finance fee ) / by the (Total amount financed)

In our case: 30 / 300 = 0.10

Note: If you only know $ amount per $100 borrowed, you can easily calculate the total finance fee. In our case the fee is $10 per $100 borrowed. You need to divide total amount financed by 100. 300/100 = 3. Multiply this number by amount you pay per $100. 3*10 = $30.

Step 2: Now you need to multiply this number by the number in one year:

0.10 * 365 = 36.50

Step 3: Divide this number (36.50) by the number of days you got the loan for (14).

36.50 / 14 = 2.6071

Step 4: Multiply this number by 100 to get the percentage.

2.6071 * 100 = 260.71%

We have got the results:

A payday loan for $300 with a finance fee of $10 per $100 borrowed for 14 days has an APR of 260.71%.

Note: Readers, if you have any questions or are in doubt please use the comments section below and ask your questions. We will reply for everyone’s benefit.

A couple of months back we had written an article on banks offering payday loans. We had also written the big banks are not interested in offering payday loans to their customers. This article is written to tell our readers that whether your bank offers payday loans or not, it is always better to get a loan from some other place but your bank. Lets discuss why.

Yes it is true that payday loans will never form the main product of major banks, but it is also true that they don’t want to miss an opportunity to make money in this billion dollar business. As we had written earlier, some banks have started offering similar loans to their customers though they don’t call it payday loans but direct deposit advances. This may be for legal reasons. Lets discuss in details.

Note: Before reading further please understand that if you really need a payday loan then its better to search for a lender online, or walk to a shop. It is a bad idea to get a small loan from a bank. They are neither flexible nor easy to deal with. Banks have your account in their hands, and if need be will do anything to get their money back. And if God forbid they over-withdraw, you will have real tough time to get the extra withdrawal back. Since they are more powerful and have lots of cash, its better you take a loan from a payday lender.

Three major banks in the USA have started offering small loans to their clients. To be approved for a loan you must have an account in their bank. If you do not have an account, you loan application will get rejected.

These three banks are: U.S. Bank, Wells Fargo, and Fifth Third Bank. These banks offer a loan at 120 percent APR. You need to have a bank account with them else you cannot apply. The Max amount that you can borrow is $500 or half of the deposit (pay) you get in your account every month – whichever is less.

Do not get confused by the low APR. The real loan is $10 per $100 borrowed and the APR is calculated on one statement cycle term which is one year. 10*12 = 120%. However the loan is packaged that way to sell. If you calculate 2-week APR it will come to 240%.

To be eligible to get this loan, your pay should fall in the same bank, else as written above your loan will be rejected. Can you smell the reason? Yes you guessed it right, they will take back their money + the fee if any, as soon as your pay falls in the account. You will not get a second chance to defer the loan payment even if you are willing to pay the rollover fee.

You know what, they will take their money back even if the deposit is not your salary. Suppose you deposit a check from a friend after taking the loan, as soon as the check is cleared, the bank will take their cash out. Of course you will get a reduction in fee because of the advance payment, but the point is you will not get a chance to lay hands on the recent deposit even if its not your pay. That was actually the terms you signed with the bank and there is not a thing you can do anything about it.

Here is more. Lets suppose for some reason your pay did not fall on the stipulated date. The bank will wait for a maximum of 35 days from the day the loan was approved. Once the 35 day deadline is passed – the bank will take their money out and leave your account in an overdraft situation (negative cash). Now you will need to pay the overdraft fee as well, on top of the direct deposit advance.

Walls Fargo and Fifth Third bank may or may not impose the overdraft fees (meaning the cash is withdrawn and the account is in negative state but no fees is levied), but the customer is warned that any further transactions will result in a penalty.

US bank does add overdraft fee. See how much they charge if their customer who has taken a direct deposit advance and unable to pay within 35 days: $10 for the initial advance, $37.50 Max overdraft fee, and $8 everyday after 4 days until the loan is paid in full. If this goes on for 7 days, the borrower would pay $71.50 for a $100 loan in just 42 days.

Lets not get into the every detail of the loan as you will find it in your terms and conditions when you will apply. The point to write this article was to warn our readers of the pitfalls of taking a short-term loan from your bank if they allow.

You are much better off taking a small loan from a payday lender as they have flexible terms and they are helpful if you default. Banks on the other hand have a very strong legal wing and will do anything to get their money back even if it is a small amount.

Unfortunately these 3 big banks have a large customer base and we are sure most of their customers are not very financially literate and they do apply to get a loan from them.

Payday loans should be avoided if they can be, but if you need some cash for emergency its better to look for a payday lender rather than go to your bank.

Read the first few paragraphs to know in simple language how payday loans work. Then we do a detailed study.

What are your options when you need some cash (not more than 500 dollars) in an emergency?

Can you go to a bank? No. Can you ask a financial institution? No. Yes, you can ask your parents and/or friends. But what if you don’t want to? From where do you get cash? From a payday lender if no other option is available.

To apply for this loan you have three options – 1. Apply in a shop, 2. Apply online, and 3. Apply by phone.

1. How payday loans work when you apply in a shop:

You walk in the shop. You fill an application. You have to give copy of some or all of the documents like bank account, last pay stub, Social Security, Driving license etc. You then sign a check for the loan amount plus the fee. Your check is dated on the day your pay falls in your account so that lenders do not deposit it before your payday. You give this check to the lender. The lender gives you current dated check equal to the loan borrowed. You deposit the check in your bank. You can even get this amount deposited in your account electronically, and pay the lender electronically. Here the process is slightly different. You don’t sign the check, but you sign a auto-debit form to withdraw cash from your account automatically on the pay day. Once you payback the loan is considered closed.

2. How payday loans work when you apply online:

You search for payday lenders online in a search engine. You finalize a website and open its online application. You fill in the details. The lender will call you. Depending on your situation and state of residence lenders will ask for copy of some documents. In some cases they may not. They send you an agreement online. You sign the agreement online. (Online signatures are legal as well.) You should have noted that while applying online you actually filled up your personal, bank and employment details and an online debit form. Lenders deposit cash in your account electronically. They debit cash on your payday electronically too. If everything is fine, loan is considered closed.

3. How payday loans work when you apply on the phone:

You see a toll-free phone number of a lender online, or in some magazine or anywhere else. You call that number. A call-center employee takes the call. They ask for some details. These are the same details that are asked in an online application. They email you a loan agreement. You need to sign that agreement and send a copy back to them. If they asked for some proof, you may need to fax that too. You have to sign the auto-debit authorization form. Once everything done, money is credited in your account. And the same way its auto-debited from your account on your payday. If everything is fine, loan is considered closed.

Note: In all three cases above, cash is deposited in your account within 24 hours from the time the loan is approved and accepted/signed by you. If next day is a holiday, it will take 48 hours. For example applications approved and accepted on Saturday till 7pm will have cash deposited on Monday.

Some lenders will ask you to FAX certain documents like your pay-stub etc. Sometimes its 100% online. Traditional credit check is not done. But lenders have their own systems to check your credit. If you do not payback in time, lenders may report your status to credit bureaus.

Now that we have learned how payday loans work lets get into the very details.

The first thing that bothers people is the APR of the payday loans. Because this one is highly talked about in the media and online journals. Frankly one should not bother about the APR. Lenders will tell the exact amount you have to pay once the loan is due. If you are taking a loan, your biggest concern should be whether you are comfortable paying that amount back to the lender on the due day. Lets take an example:

Lets suppose you take a loan for $300 at $15 per $100 borrowed for 14 days (two weeks). (Note that this rate is very normal. Most lenders charge this.) If you calculate the APR it is: 391.07%. Now that looks huge especially compared to a mortgage that you can get at 5% or lower. But are you actually paying that APR? On paper yes, but in reality you are only paying 300+45 = $345 back after 14 days. Your concern should be – will you be able to payback the lender $345 after 14 days. Period. Will that won’t be a problem. If not, you should go ahead with the loan and not bother about the APR that is being advertised.

Now is the word of caution. APR will become a huge problem though, if you do not payback the loan in time, this 391.07% will be a killer as time passes. Consider this if you do not payback the loan for one year you will need to payback $1,473.21 to the lender after one year that is almost five times the money you borrowed.

What you learn? It is that if you have taken a loan with very high interest rate, payday or whatever, you should payback the whole loan in your very first due date. Else this will escalate into a situation which will get very hard to manage.

Many financial pundits advise against payday loans. Are they really that bad? Should you not take a payday loan? Its great if you have the cash flow or can get cash from some other place or people like friends or family members. The point is what if you don’t? Lets suppose your car needs an emergency repair else you may not be able to attend office and there are pay-deductions. Compare a payday loan fee to the deductions from your salary. We bet salary-deductions will be a major issue than paying a small fee to the lender. This fee will be fraction of what happens if your employer deducted your pay.

In short, if you really need the cash and cannot arrange it from any other source – you should get yourself a payday loan to fix the emergency situation to avoid from any major issues that may happen due to it. However to avoid any major hassles, payback the loan in time.

What is a rollover?

A rollover happens when you have difficulties paying back you loan. Your loan is given an extension for another 14 days (or 30 days if you payday is 30 days away). However it is not free. You will need to pay a fee for rollover. Typically this fee is equal to the fee you had to originally pay. In our case it was $45. So if you pay $45 as fee, your lender will give you extension for another 14 days after which you have to pay $345. Your total fee for the month = 45+45 = $90. Did you see APR at work?

Rollover should never be taken. It can be taken only if you find it very difficult to payback. Or you have some even more important emergency to attend. It should be limited to one. In any case there are laws regarding rollovers in every state, or your lender may not offer you more than 3 rollovers.

If the loan fee is so small how lenders make money?

Millions of people apply for a payday loan everyday. Either on the Internet or in a shop or by phone. Even if 20% of them gets approved that’s a lot of people being approved for a loan everyday. In fact payday loan today is a $40 billion-per-year industry in the United States.

Rollovers are the one that makes most money for the lenders. Many borrowers repeatedly roll over the loans. Lenders are more than happy to roll over as they make almost 50% of the original amount as fee if they rollover thrice. Yes its true that if people did not rollover, lenders income will significantly reduce.

Payday lenders have other businesses as well like foreign currency exchange, utility bill payments, license processing and other finance related business.

What information is required to get a payday loan?

Lenders may ask several questions like name, address, social security, bank account number, bank routing number, employment information etc. You may also have to give information about a few of your family members or friends. In case you default lenders may inquire about you from them. But in any case they cannot harass them.

Is your personal information safe?

This is very difficult to answer this as it depends on with whom you are applying. Like in any other industry, there are crooks in payday industry as well. But in our experience most lenders are not there to steal your identity. If you don’t know, identity theft is a serious crime in USA. Lenders know this and don’t want to get into any hassles in their business. Heck, they are already in a risky business, so we don’t think they will want to take another risk. They are very busy managing their business and calling people who haven’t paid them. But yes, some of them do sell your data to third parties. Now what these third parties can do is something that you can guess.

As long as we can remember in the recent past no one has ever complained for identity theft against any payday lender. If at all, complaints have been made for high interest rates and harassment, but not for identity-theft.

It is safe to apply for a payday loan, only thing is please do read lenders terms and conditions.

Why payday lending is popular in the United States?

That is because banks refuse to give a loan as small as $500. Interestingly many emergencies need only $500 or less to fix. This created a gap in the market place, which payday lenders filled.

Any other information?

Payday loans are illegal in 13 states in the United States. It cannot be sold to military personal as well.

If you really need a payday loan you should research the rates first before deciding the lender. Do not pay anything more than $15 per $100 borrowed for 14 days. Forget the APR, just see the fee. Also do read the terms before accepting the loan. Ask your lender if you cannot understand something there. Be prepared to pay the loan back in full on the due date.

Some banks do offer payday loans. But we are against it. The banks have full control over your account. If you are unable to pay, banks can do anything to your account to get their money. If you want to do something else with that money you wont be able to withdraw. Banks would have already withdrawn it. And also it will get very hard for you to fight against these again banks for a few hundred dollars. Its better you avoid banks. Further banks have many customers, they are not interested in your problems. You lender will at least listen to you, banks won’t.

Many people who opt for a payday loan in time of an emergency find it really difficult to payback the loan due to its very high interest rate or non availability of cash. Well there is nothing wrong in knowing that you don’t have the ability to payback the loan as per the agreed terms.

Nobody can foresee the future. When you signed up and agreed to the terms you had no idea you wont be able to payback the loan – and that’s perfectly acceptable. Lenders too know that – and at least the lenders with whom we choose to work with know this and are willing to change the terms if any of their customers are finding it difficult to payback their loans.

But we believe that most honest lenders who are in this business for the long term do understand that sometimes their customers may have difficulties in paying back the loan. So whether you have taken a loan from our website or anywhere else these tips should help you to negotiate with your lender if you are having difficulties paying back your loan.

What is not acceptable is that some people take a loan and forget to payback even the principal. This is ethically and morally wrong. Lenders helped you in the time of an emergency, and you should try your best to keep your obligations of paying back the loan with interest and in time usually your next payday. Exceptions can be there but you should not take a loan thinking that you will never ever return the money. (Note: Not paying back a loan might lead you in legal trouble with your lenders, so its best avoided. In such a situation please talk to your lender for a way out.)

You should know that almost 10-20% people actually do not payback their loan either in part or in full (we are talking about just the principal, not the interest), and that is substantial risk to the lenders. This is one of the reasons why payday loans are sold at a very high rate. If everyone paid back their loans timely, payday loans would have been much cheaper. 🙁 This default costs lenders a huge amount of their revenue every year. Isn’t that a valid reason for a lender to get very angry when someone defaults? Therefore you should talk to your lender if you don’t have money to payback. Eventually something will come out.

OK, so you took a payday loan and have difficulties paying back, but you are willing to pay. Great. Lets discuss the ways you can negotiate with your lender to get better rates and pay a lesser amount and eventually get out of payday loan debt.

Negotiation Tip 1) Your first step should be to know if your lender has a license to do business in your state. You see out of 50 states in the US, 13 states have banned payday loans. Strictly speaking payday loans are not banned in these states, but the laws are such that it makes payday lending business in these states unfeasible. The rates have been capped so low that payday lenders have closed their shops as these interest will not make profits for the lenders. Here are the 13 states where payday lending is illegal:

1. Arkansas
2. Arizona
3. Connecticut
4. Georgia
5. Kentucky
6. Maryland
7. Massachusetts
8. New Jersey
9. New York
10. North Carolina
11. Pennsylvania
12. Vermont
13. West Virginia

If you reside in any of the above states, technically you cannot apply for a payday loan. But since the laws are so vague in the Unites States that many lenders operating in other states offer payday loans to consumers residing the states where it is illegal. Mostly its done online. Since it is hard for the government to monitor online activities, some payday lenders succeed in offering payday loans to people residing in states where its illegal.

How to know about the lenders business legality? The terms of the loan clearly mentions the name of the lender, their business license number and the business address. You can look for their business information in Dept of Corporations website of your state. For example to look for a business legality in California, you can go to the California Dept of Corporations website. This is located at https://www.corp.ca.gov.

Similarly for your state search Google and enter the business information of your lender in the Dept of Corporations website of your state. If the lender is not there, they do not have license to operate in your state.

If you find that they are not listed, call them and tell them specifically that they did not have the right to do business in your state in the first place, but you are willing to pay the loan back at a competitive rate. They should give you better rates and offer you better terms to pay the loan.

Negotiation Tip 2) As soon as you understand that you may not be able to pay, you should ring your lender and inform them. Ask for options. Usually lenders will ring you one day before the loan is due to inform you that the loan is due and you should keep sufficient amount in your bank account to make sure automated bank debit is passed or the check that you gave to the lenders does not bounce.

Remember that lenders don’t want to take someone to court. For a mere 500 dollars does it make sense to take someone to court? Will you do? If not, lenders won’t do too. But that does not mean they cannot harass you. They can and that is exactly why you should negotiate. Lenders are almost always willing to negotiate, they know after all getting some cash back is better than getting nothing.

Negotiation Tip 3) How to negotiate?

Some people find it hard to negotiate. Well its not that hard. First thing is to know exactly how much can you pay. For example $50 every two weeks if you have taken a loan for $300. 6 installments will clear the original amount. 2 more and you end up paying $100 extra to your lender. That is it. They make a profit, you end up paying back your loan the way you want and not the way lenders demand. Plus you get the time to pay and reduce the interest significantly.

Please note that this is just an example of negotiation. Please do not follow it as it is. Your financial situation may be different. Call your lender for better rates.

Taking the above example as a pointer, you can negotiate with your lender. But first thing is – you should know how much you can afford paying back. Take it from there. Do not budge and please do not pay more than you cannot afford. Be firm and lenders will oblige.

When they oblige, tell them you don’t want to go the direct debit route. You would rather pay by post-dated checks. This will help you to make sure you pay exactly as decided. If you allow them direct debit, a lot of fraud can happen. Auto payments can run forever unless cancelled by the holding authority (your lender). Well it may not happen, but why take a chance? Paying by post-dated checks is the safest way to pay your lender. You can sleep well.

Yes you may have to write and sign quite a few checks, but this will save you from a lot of hassle.

Other points to remember:

Never rollover a payday loan. You will end up paying much more than what you agreed to pay now. Rollovers involve additional fee. Two or three rollovers will actually exceed your original loan. Sometimes you may pay hundreds of dollars to you lender without actually making a single dime payment of your principal.

Make sure the lenders do not pass your debt to a debt collection agency. These guys are even worse. They will call you almost everyday multiple times and ask you to pay. You must avoid these agencies at any cost. Therefore you must talk to your lender before anything of this sort happens.

Debt collection agencies will buy debt from the lender at a lower price and ask you to pay the debt higher than what they have bought so that they can make a profit. As you can see you now pay for their profits as well. Therefore you must at any cost make sure you are not referred to a debt collection agency.

Eventually if that happens – follow the same advice. Tell them what you can pay and ask them to plan accordingly.

Remember lenders too don’t want to get into any trouble or send you over to a debt collection agency. If anything wrong happens eventually (like court cases etc.), even the lenders have to be involved. They would rather stay miles away from courts. They want to concentrate on their business not a few hundred dollars they will get from you.

If a lender is calling you again and again for repayments even after you told them that you are willing to negotiate, you should report this to the Federal Trade Commission at 1-877-382-4357. You can even go their website and report: https://www.ftc.gov/ or here: https://www.ftccomplaintassistant.gov/

Any violations of the Fair Debt Collection Practices Act should be reported to Federal Trade Commission.

You should know the finance laws of your states to handle your lenders better. They will listen to you if they understand that you are familiar with the laws.

If you are in deep debt consider a non-profit debt consolidation agency. They are better than for-profit agencies. There are many please Google it for your area.

Once everything is settled start building your credit. Pay your installments in time. Do not default even once. You have done a lot of hard work to come to this place, now please do not destroy your credit by not paying as promised. You are only paying what you can afford, no excuses here.

Once you are out of payday loan debt start saving and make sure you never have to turn to a payday lender for cash.

Note: Recently we had written an article on how to get a personal loan with a bad credit. However please understand that its extremely difficult now-a-days to get a personal loan from a bank even with a good credit. You will actually need a collateral to get a personal loan. Banks do not trust people anymore these days. 🙁

And since you will be paying back a personal loan in installments – a personal loan is also known as installment loan.

Lets discuss the difference between a payday and a personal loan.

Difference 1. Interest rates are higher in payday loans:

If you compare the APR (annual percentage rate), payday loans have much higher APR than personal loans. Most payday loans come with a APR of 200% or more, sometimes it gets into 1200% as well. But remember APR are calculated on the basis of a whole year, so they can be vague and misleading.

Since the amount in payday loans are always small it never hurts if you have the capability to payback. For example if you take a 100 dollar payday loan for 10 days and you payback $120 – your APR comes to 730%. As you can see though the APR is huge, you only pay $20 extra. With personal loans it is entirely different story. But what you read in newspapers and online news journals is that 730% – they don’t tell the real picture!

You can get a personal loan ranging from 12% to 100% APR per year. However since it is a big amount, you end up paying far more than a payday loan. For example for a $10,000 personal loan you may end up paying $15,000 in three years time – that is $5000 extra.

Moreover lenders also sell insurance with these loans that can typically raise the effective interest rates as insurances are also clubbed together with the loan and have higher interest rates. Lenders do not calculate the insurance rates while calculating the APR of the loan. So it may get very confusing. You must therefore calculate the total money you will payback to the lender in one year. If you are comfortable, only then go for a personal loan.

Personal loans have much lower interest rates because you need a collateral to get approved. Collateral may include cars (also knows as title loans), consumer electronics, costly tools, and jewelry. Real estate and wedding rings are not taken as collateral. If you are not able to payback a personal loan, you lose your collateral. However due diligence is done before approving personal loans. People with low income and less ability to pay are not offered a personal loan. Remember that personal loans are offered by banks and not by small lenders living in your neighborhood.

Why high interest rates in payday loans?

That is because the risk is more in payday loans than in personal loans for the lenders. Please note that gone are the days when personal loans were unsecured loans. Now you need some kind of collateral to get a personal / installment loan. Else even with a very good credit and/or a guarantor you may not get a personal loan.

The reason for this high risk in payday loans is that people who opt for payday loans live from payday to payday. If somehow they are laid form their job or their pay is deferred, they may not be able to payback the loan to their lenders. A huge percentage of them just do not pay back. Yes the amount may be small, but the number of people opting for this type of loan is big and if a few of them default, it will create a huge problem for the lender. And contrary to what you may think – the defaulters in payday loans are just too many. This too increases the risk to lenders and thus increasing the loan rate. Unfortunately people who pay bear the costs of people who do not – but that is the real story of payday loans.

Moreover payday loans are 100% unsecured loans. Which means no collateral is required to get a loan. Lenders offer you a loan in good faith. Payday loans are the only type of loans right now in the US that are 100% unsecured. Every other form of loan is secured. It is common sense to assume that any unsecured loan will come at a high interest as the risk is too much for lenders.

Unfortunately US laws almost always favors the customers. Payday loans are seen as a bad omen for the financial industry. Every now and then one or the other lawmaker comes out with some or the other law to restrict payday loans in their states. Consumers sue their lenders even if they default in paying the loan back. All these things too increase the risk in payday lending business. This too pushes up the interest rates on loans.

Lastly greed comes in. Since these loans are not properly regulated, lenders charge whatever they can from some people who they see as “wealthy” clients. Since they know everything about you before offering you a loan, it is easy for them to charge you more if you have a good job and you need cash immediately. Interestingly the same lender may offer a different rate to some other customer.

Difference 2. Payday loans are for shorter duration, personal loans are for longer duration:

You need to pay back a payday loan within days typically on your next payday. This could be anywhere from 1 to 30 days. However personal loans are paid back in years.

The reason is plain and simple. Payday loans are of small amounts ranging from 100-1000 dollars. Average is 300 dollars. You don’t need years to payback this amount. Moreover the interest rate is also too much. You want to get rid of payday loan as soon as possible, lest it will take you into a financial mess you won’t be able to get out fast. In fact it will take years to get out of a payday loan financial mess if you really get into it.

Payday loans can be paid back by a post-dated check, or by automated withdrawal on the due date.

Personal loans are for bigger amounts and therefore one needs time to pay it back in installments. You need to pay some amount every month which includes the interest and the principal. Mostly they are paid back in automated withdrawal from bank account. Every year the lender reviews the interest rate, and accordingly the payments may increase or decreases. If interest rates have fallen, your payments too will go down and if interest rates have risen, you may need to shell out more every year. Irony is that – whatever the case – your monthly payments will only increase every year.

Difference 3. Payday loans are for small dollars and for emergency purposes only. Personal loans can be bigger and hence are used for solving big financial issues/purchasing/investing in costlier things.

As written earlier payday loans never exceeds $1000. It is really difficult to get a payday loan greater than $1000. In the US lenders do not offer loans greater than $1000 even if you have an excellent credit and great payday loan history or even if you cite thousands of valid reasons for extra money. Moreover you cannot combine 2 payday loans together to get a bigger amount. You will have to first clear the first loan, then get a second one. Effectively capping you at $1000 Max. It is an emergency loan to help pay some bills if you are stuck, not to solve a huge financial problem. Also payday loans will have to be returned or paid back within 30 days Max. Lenders won’t allow more time than that. You may get a rollover (extra time to payback for extra fees – but that is not recommended).

Personal loans however can be of greater amounts as they are offered by banks and large financial institutions. You can get a $10,000 or more personal loan depending on your financial condition and credit rating. You also get more time to payback a personal loan. You can pay it back in 2-3 years in installments.

Difference 4. Traditional credit check not done on payday loans, however its done for personal loan:

Payday lenders usually do not do traditional credit check like going to official credit rating websites and getting a credit check done. They have their own resources like CL Verify etc to do a credit check. Basically this is a payday loan credit check. Lenders want to know payday loan history of their customers before offering a loan.

Personal loan lenders however do traditional credit checks. They will not offer a loan to even a below average (but not poor) credit rating person. You have to have a good credit to get a personal loan. People with poor credit rarely get a personal loan.

Side note: Law makers and consumer advocates of late are targeting payday lenders to lower their rates or to get out of business altogether. 15 states in the US have already banned payday loans. Payday loans cannot be offered to military personals too.

Interestingly personal / installments are not that criticized. Unfortunately in both cases the consequences may be severe if you do not payback the loan.

Difference 5. Rollover possible in payday loans, not possible in personal loans:

If you cannot payback a payday loan, your lender may offer a rollover. It means for an extra fee you get a few more days to payback the loan. Rollovers are costly and not recommended.

Lenders of personal loans do not offer rollovers. You may need to go for a debt consolidation if you cannot payback a personal loan. However it can be renewed every few months. The rate can also change every year if its a flexible personal loan. Most loans are flexible. Fixed rate loans are rare now days. Flexible loans are safer from the point of view of lenders as they are safe if suddenly the interest rate increases. Unfortunately for the borrowers, this means ever increasing payments.

Here are a few reasons why people apply payday loan by phone and not online. Some reasons are genuine and some unnecessary fear.

While asking some of our phone applicants why they chose to apply by phone and not online we got some interesting answers. Please note that right now we have stopped offering payday loans by phone as the cost of running the call center was far exceeding the profits our lenders generated by those applicants. We do have plans to offer loans by phone in the near future but as you can understand we will again have to take the business expenditure into consideration.

We have experienced that many people are not comfortable applying a payday loan online. This may be due to a lot of reasons. Our lenders found some reasons and the most common reasons are:

1. Not comfortable writing their personal details online. More than 60% told us that they were not comfortable applying online as they feared data theft. Unfortunately personal details like social security number, bank account number etc are required to help customers get a loan. Without this information any short term lender may not be able to offer a loan.

The fact: Reality is that most reputed online lenders will never resort to phishing. For one or few clients they don’t want their online reputation to be jeopardized and business to be affected. Their business is more important than their customer’s personal details. They either offer a loan or reject. Your data is safe with them. So the fear that data may be stolen online is unnecessary. Moreover now days most payday loan sites are secured. They will be starting with the URL HTTPS:// which means it is a secured site. Data theft online is virtually impossible in a secured site. Data is encrypted and sent across wires and decrypted once they reach the servers of the loan website.

Our loan application here will convert to HTTPS once you press the apply button. Our lenders are highly reputed and adhere to OLA responsible lending policies. What will they do with your data except offering you a loan?

A word of caution: Though the reputed lenders won’t resort to phishing, it cannot be ruled out that there are some bad lenders who are there just to get your personal information. These bad lenders also bring bad name to the payday loan business. We hate them too.

So how do you trust an online lender? Make sure that they are members of a recognized organization. For example all our lenders are members of OLA (Online Lenders Alliance) they have certain code of conduct for the member lenders. All lenders need to follow these laws else action will be taken. In the US almost every reputed payday loan company is a member of OLA.

If you are applying a loan online on a website that is a registered member of OLA you need not worry. Your data is safe.

2. Not comfortable applying online while in office. Almost 20% said they were not comfortable applying payday loan from their office computers. They said they are not comfortable writing the application sitting in the office, as people (their office colleagues) would come to know, so they better call.

The fact: There is no shame in applying for a payday loan. No one is bothered with your finances or how you handle them. Your finance is your business not theirs. We all need cash and sometimes we don’t have it. What is wrong in it? There is nothing wrong in applying for a loan if you need cash. Most governments run on loans. Why be ashamed?

Yes if your job is at risk than it is a different matter. If your boss does not want your office computer to be used for personal matters than you are better off calling by phone to apply. Your job is more important. Save it.

3. No internet connection. 10% said they were writing the application when they lost the internet connection. This is something that nobody has control of. Payday loans are usually required urgently so it’s perfectly ok to apply by phone if you don’t have internet connection or your comp got disconnected.

4. Other reasons: There were many other reasons why people applied by phone: “I hate typing”, “I did not understand what they were asking online so I called”, “my keyboard stopped working”, “my comp crashed”, “someone said its better to apply by phone”, “I am bad at typing”, etc.

We wrote this article to help people understand that it really does not matter if you apply online or by phone. If you have a job, an average credit, and good past history with payday loans, it is likely that you will get a loan. You apply online or by phone – the choice is yours.

If you read these two articles here and here you will realize that the Federal Deposit Insurance Corporation (FDIC) tried its level best to kill the payday loan industry by trying to make banks a direct competitors of payday loan industry.

In short what it did was to encourage many banks to lend small-dollar loans to consumers. This experiment started in 2008 and ended sometime in 2010. FDIC considered the program a success. (Oh really, then why most banks do not offer payday loans to their clients?) However they also agreed that small dollar loans from banks cannot compete with the cost and ease of payday loans.

The result? As you can guess even today, payday lenders are preferred over small loans from the banks. Even consumers do not go to banks to apply for a payday loan. They know they will get rejected anyway.

We will not get into details of what happened in the testing phase. You can read about them from the articles. But would just like to say that banks were actually using the small-dollar loans as a medium to get clients open a current account with them and deposit cash. They were more interested in overdraft fees and Non-Sufficient Funds (NSF) fees made from these clients. If you don’t know Moebs Services, an economic research firm, estimates that NSF fees account for 18% of the net operative income of the banks. Credit unions are even better. They make around 60% of the operating income from NSF fees. How is that?

Now even after a successful experiment, banks are still shy of giving away small-dollar loans to people with bad credit. Here are a few reasons to explain why:

1. Banks do not have proper rules in place for short-term lending and small-dollar lending.

2. They still have no expertise in handling payday loans. They will actually mess it up over a period of time if lot of their customers start demanding payday loans from them.

3. Banks do not have enough manpower to handle small-dollar loans. They are already preoccupied with many other services that banks already offer. Payday loans will be an extra burden on the same manpower. This may actually hinder their growth.

4. Big bank’s business model is not short-term loans. They are better off proving longer term personal loans, home loans, car loans and other products.

5. Payday loans profits are not very attractive for banks. They are least bothered to make $50 to $100 on a loan.

6. Moreover banks are regulated by so many rules that it is impossible for them to charge like payday lenders.

7. Banks don’t miss payday loans (though they hate payday lenders but love the money payday loans bring to their business indirectly) because they make up with the overdraft fees and Non-Sufficient Funds (NSF) fees.

8. Most people will be rejected applying for payday loans from banks as banks look for credit rate and history using traditional means from the three credit agencies. Payday lenders do not go to these credit agencies to look for a persons’ credit history. They are just interested in looking for payday loan history of the consumer. They can get this data from TeleTrack.

9. There is a social stigma attached to payday loans. Big Banks are brands and they do not want their brand to get a bad name in society. They will never ever lose a big business for a small business.

These are some reasons we think it is still a long time before banks even think of offering payday loans to their clients. Though some banks do offer short-term loans but that is not fully advertised.

What does it implies? It means that if state laws allows and Federal Deposit Insurance Corporation (FDIC) cooperates, payday loans business is here to stay.

Do not forget that whatever the financial guys says, the truth is that millions of people depend everyday on payday loans to pay their bills and live life smooth. If payday loans are banned or are taken over by the big banks – the people with low access to credit will suffer.

According to a news report officials are investigating banks role in payday loans. Why should they do it and what is the banks fault if someone is giving money to someone at an interest and using them as a medium to do business?

When someone applies for a payday loan, they do not get cash in paper – the only way they can get cash is in their current bank account. This is very important as otherwise the risk for lenders increases many folds if they start giving real cash to people seeking these loans. Its vitally impossible to physically track them and ask them to give their cash back. This will in fact make payday lending a very high risk business – so high that ultimately this business will be dead.

This whole process of giving and taking money back has to be automated so that there is no need for lenders to run around people asking their money back – it should be done automatically. And that’s only possible through banks and they need to co-operate. Now you get the idea. Banks do play a role in payday lending. But why should they do it? They can deny a payday lender putting money in their customer’s account and then automatically take away cash from their customers account when its due. Why do this extra work? They can easily deny the whole operation. Of course legally they cant do It, but they can create hassles for the lender. But they don’t want to do it. WHY?

Have you ever heard of over-draft fees? An over-draft facility is when you are able to withdraw cash or get a check cleared without having money in the bank. Of course this comes with a rider. You need to put this money back in your account within a stipulated time to avoid legal hassles. You cant win against these financial giants. Can you. So you will actually put that money back as soon as possible in your account. But this is not all. Why should banks give you cash from their pockets and help you. That’s not their business. It is because a fees is associated anytime an overdraft is done. Did you get the point. The banks want to make money from an overdraft. They are not interested why an overdraft is done. Their only interest is the fees you pay when it is done.

Now consider this. There are a lot of people who take a payday loan and are not able to payback the loan due to non-availability of cash in their accounts. Banks fill this gap and make money. Banks pay the lenders from the clients account if overdraft facility is available. They in-turn charge their customers a fees to do it. Both the banks and the lenders are happy, leaving a sulking and poor customer running pillar to post to fill their account back with cash.

Look at the customer. He not only pays an interest to the lender, but he also now have to pay this overdraft-fees to the bank. Isn’t this silly? Yes it is and therefore officials are looking closely the roles banks pay in payday lending business.

It is strange that some banks allow automatic withdrawals even when a customer has requested they be stopped. In New York a customer requested to close her bank account. This was not done by the bank. She was shocked to see $1500 gone from her account in matter of days and the reason attributed was interests for the payday loans received. While it could be true that she indeed had taken a loan, but it is also important to note that banks had no business to keep the account open when that customer had clearly asked them to close it.

Some banks have even started offering payday loans to their customers. However this is still not a wide practice and is not done by all banks. But we wonder how long will it take for all banks to start payday lending?