Applying for a payday loan is usually easy and quick, especially because lenders don’t review your credit report. These loans are easy to qualify for and provide quick cash to help you pay for your daily expenses until your next payday. 

While it’s not a long-term solution because these loans come with very high finance charges, you can usually walk into a store or apply for a payday loan online to get cash instantly. Read on to learn more about how the loan process works, how much you can borrow, and alternatives to consider.

How to Apply for a Payday Loan Online

Applying for payday loans online is usually very quick and easy. However, it’s important to do your research to ensure you’re working with a reputable lender. Here are the steps you can follow to apply for the loan.

1. Research Different Online Payday Loan Providers

Find out whether payday loans are legal in your state. Search online to make a list of loan providers. You can get a payday loan in-store from a local lender or online from a direct lender or an unaffiliated third-party lender. Compare the lenders based on the following factors:

  • Online reviews on sites like Better Business Bureau (BBB) and Trustpilot
  • Loan amounts
  • Finance charges and fees
  • Any complaints registered against the company
  • Ease of application
  • Customer service options (live chat, phone support, etc.)

While this may take time, it will allow you to find the best online payday loans for your financial needs.

2. Understand the Eligibility Criteria for Online Payday Loans

Learn more about payday loan requirements to ensure you’ll qualify. In most cases, lenders only require that borrowers must:

  • Have a valid identification
  • Have proof of income
  • Have a checking account in good standing
  • Be at least 18 years old

You can get a payday loan online with no credit check and instant approval since most lenders don’t check the borrower’s credit history. In most cases, loans are approved in as little as 15 minutes once you submit the application.

3. Gather Relevant Documents 

Gather all the documents you’ll need to apply for the loan to make the application process easier. Here are the documents you’ll generally need:

  • A government-issued ID
  • Social Security number
  • Bank statements
  • Pay stubs
  • ACH authorization or a post-dated check (for use in applying for in-store loans)

Borrowers are asked to provide payment authorization as a part of the application process for a payday loan. This allows the lender to take the payment from your bank account automatically on the due date.  

4. Submit the Loan Application 

Once you have the necessary documents on hand, you’ll need to fill out a loan application online. This part of the process is usually quick and should only take 5 to 10 minutes. Submit the loan application along with the requested documents.

Once approved, you’ll sign a loan agreement with your payday lender that will clearly outline the terms and conditions of your loan. With payday loans online with same-day approval, you’ll typically get the decision within minutes, and the funds will be deposited into your bank account the next business day.

How Much Can You Borrow With a Payday Loan Online?

The amount you can borrow with a payday loan online will depend on state laws. In the U.S., 32 states have capped maximum loan amounts ranging from $300 to $1,000. In other states, the cap is based on a borrower’s monthly income.

How Much Do Online Payday Loans Cost?

Online payday loan costs vary based on state laws. Finance charges can range from $10 to $30 per $100 borrowed. While this may not seem like much, keep in mind that payday loans usually come with a two-week repayment period.

This means that if you borrow $100 for two weeks and the fee is $15, the annual percentage rate (APR) is almost 400%.

The current average credit card interest rate is 27.62%, which is much lower compared to payday loans.

Are Payday Loans Legal?

Payday loans are currently illegal in 18 states:

  1. Arizona
  2. Arkansas
  3. Colorado
  4. Connecticut
  5. Georgia
  6. Maryland
  7. Massachusetts
  8. Montana
  9. Nebraska
  10. New Hampshire
  11. New Jersey
  12. New Mexico
  13. New York
  14. North Carolina
  15. Pennsylvania
  16. South Dakota
  17. Vermont
  18. West Virginia

In other states where payday loans are legal, rate caps may apply.

Alternatives to Online Payday Loans

Many borrowers rely on online payday loans because they may not be aware of other loan products, or they don’t know they may qualify for them even with bad credit. Here are some options to consider.

Personal Loans

Many online lenders specialize in bad credit personal loans to cater to borrowers who may not qualify for other options. These lenders frequently have relaxed underwriting guidelines compared to other lenders who extend these kinds of loans. You may be able to borrow installment loans to pay for emergency expenses at a lower rate than what you’d pay for a payday loan.

Payday Alternative Loans

Some credit unions offer payday alternative loans (PALs) at reasonable rates. However, you’ll need to be a member of the credit union, and eligibility may vary based on the type of loan.  

Cash Advance Apps

You can use apps like Dave, Brigit, and EarnIn to borrow an interest-free or low-fee cash advance. Like payday loans, you’ll have to repay the money on your next payday. However, these advances are usually much more cost-effective than online payday loans.

Retail Credit Cards

Retail store credit cards (e.g., Best Buy Visa, Costco Anywhere Visa, Target’s Red Card, or Amazon Prime Visa Signature card) are usually easy to qualify for, even with poor credit. These cards usually have a low credit limit, but you may be able to use them for purchases outside the store, which can help when you’re facing a cash shortage.

Family and Friends Loan

Instead of getting trapped in debt, you may want to ask a family member or a good friend for temporary financial assistance for unexpected expenses. While this may be an uncomfortable conversation, you can create a legal repayment agreement to ensure there are no problems later.

Apply for a Payday Loan Online with a Direct Lender

You can get a payday loan online easily and quickly if you have valid identification, an active checking account, and a source of income. However, the high lending rates and short repayment terms can make your financial situation worse.

If you must borrow a short-term loan, understand how payday loans work, compare the costs carefully, apply with a reputable direct lender, and make sure you can repay the money you borrowed by the due date.