The definition of a payday loan is straightforward: It's borrowed money that's usually scheduled for repayment on the borrower's next payday. These short-term loans, typically ranging from $100 to $1,000, are due within the borrower's pay cycle, whether weekly, bi-weekly, or monthly.
People generally take out payday loans to cover urgent expenses, such as emergency medical bills or unexpected car repairs. These types of loans of $100 to $1,000 typically are not offered by large banks but are offered by specialty lenders like payday loan lenders that may be able to lend you this amount on short notice with a quick repayment schedule.
To make it easier to find a payday loan online companies Lightning Money Loans provide the ability for you to submit one online form and have your information shown to many lenders and financial partners to see if one can issue you the loan that you're looking for, saving you time and effort from filling out multiple forms on many websites.
We've covered the definition of a payday loan, but how does it work? Let's break it down.
To get a payday loan, you'll need to submit a loan request. Borrowers typically need to meet a few basic requirements:
You can fill out the loan form online or in person at a payday lending storefront.
Example: Jane needs $300 to cover an unexpected car repair. She visits a payday lender's website, fills out a loan request, and submits her recent pay stubs and bank account details.
After submitting a loan request through a service like Lightning Money Loans, the request is forwarded to lenders and financial partners. Because the loan amounts are small and the terms are short, the loan decisions are often quick, usually within minutes. If approved, the borrower can typically opt to receive the funds by direct deposit in their bank account as quickly as the next business day.
Example: Jane's loan request is approved within minutes, and after she agrees to the lender's terms and conditions the $300 is deposited into her checking account by the next business day.
Payday loans are generally due on the borrower's next payday, hence the name. The repayment period is usually one to four weeks. The borrower must repay the loan, plus any interest and fees, by this due date.
Example: Jane's next payday is in two weeks. She needs to repay the $300 loan plus a $45 fee, totaling $345, by her next paycheck.
Payday loans are extremely convenient and relatively easy to qualify for. However, there's a tradeoff. Payday loan fees and interest rates are higher and vary widely based on lender and local regulations. Annual percentage rates (APRs) for payday loans can exceed 400%.
Example: If Jane borrows $300 with a $45 fee for two weeks, the APR will be over 390%, a higher rate than other loan types. But other loans were not available on such a short schedule and such a "small" amount, so Jane is happy to borrow the $300 and repay the money back, plus interest, in two weeks.
For a more complete definition of payday loans, it's worth understanding how and why people use them. Here are some common uses.
Payday loans may be used to cover unexpected expenses that arise suddenly and require immediate attention. This can include emergency medical bills, urgent car repairs, or unexpected home maintenance issues. The quick approval and disbursement process make payday loans viable for these time-sensitive situations.
Example: Sarah's car breaks down unexpectedly, and she needs $400 for repairs to get back on the road for work. A payday loan provides the money she needs quickly.
Payday loans can help close the gap between paychecks for individuals who might experience temporary cash flow issues. They are especially useful for covering essential living expenses such as groceries, rent, and utilities when funds are low.
Example: John's paycheck is delayed, but his rent is due in two days. A payday loan can help him cover the rent on time, avoiding late fees or eviction.
Some borrowers use payday loans to avoid overdrafts and return check fees from their banks. By taking out a small loan to cover account shortfalls, they can prevent costly bank charges.
Example: Lisa notices that her checking account balance is dangerously low, and several automatic payments are about to be processed. A payday loan can help her avoid overdraft fees and returned check fees, which could be much higher than the interest paid on the loan.
So if you're in need of a payday loan online, look no further than LightningMoneyLoans.com, with one simple online form your information will be sent to multiple lenders and financial partners saving you from having to find multiple lenders online then fill out their forms, then wait for an answer, then do it over and over again. And the best part is after submitting your information at LightningMoneyLoans.com you will get a decision within minutes and if approved, you could get your funds as quickly as the next business day. So don't delay, if you're looking for a loan online, get the funds you need fast via LightningMoneyLoans.com.
