A payday loan is more like a cash advance than a traditional personal loan. The payday loan lender allows you to borrow a certain amount of money, usually based on your income, until your next payday. Online payday loan services take your application, verify the information provided and are able to send you your money through your checking account. When the payment is due the money is withdrawn from your checking account by electronic check.
There are two ways to get a payday loan. You can deal directly with a payday lender or you can use a payday loan broker.
- A payday loan broker is not a lender, your application will be sent to a lender and if they accept it, they will issue your payday loan. A direct payday lender is the lender, so at all times you’re dealing with the company who will issue your loan.
- If your have certain types of employment, such as temporary work, just started working or have a bad history with other payday loan companies a payday loan broker may be able to help you find a lender that will work with you. A direct lender would accept applications based on their criteria, if you do not meet those qualifications for a loan you will be denied.
- A payday loan broker and direct payday lenders may each offer different ways to make payments. Some companies withdraw the money directly from your checking account while some offer other options. The other payment options may include Western Union, or payment at a local office if one is available.
- Both types of lender may offer the option to extend your loan at the end of the loan term. Usually these will incur an additional charge. If you feel that you need to borrow money from a payday loan lender, but you’re not so sure that you’ll have the money to repay it in full on your next payday, this is a feature you should look for.
- Both lenders will tell you how long it takes after approval to receive your funds. For some it’s the same day, some the next working day and some can take longer than that. It’s important to check this information before agreeing to a loan.
- While a payday loan broker and direct loan lender have come of the same loan features, the main difference is with a direct lender you know what you’re getting before you apply. However, you may end up with a better deal going through a broker, since they can find you the best lender based on your information.
There are many payday services out there, you just need to make sure the one you choose is right for you.
Whichever you choose remember a payday loan is a loan with a very high interest rate. Like taking a cash advance on a credit card, it’s something you want to pay off as soon as possible. While it’s nice to be able to get the money you need in an emergency, remember it does come at a very high price.