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How direct deposit short-term loans work

How to get a loan deposited into your bank account.


Editor's choice: OppLoans Installment Loans

  • Easy online application
  • Quick approval
  • Long repayment terms
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Thanks to the Automated Clearing House (ACH), an electronic network for financial transactions in the US, a short-term lender can deposit approved funds into your bank account rather giving you a check.

There are a number of short-term lenders who offer online loans, and most providers rely on direct deposits to get funds to their customers. You’ll usually apply for these loans online, and you will have to provide details of an account that accepts direct deposits.

How does a direct deposit short-term loan work?

The ACH system disburses funds and collect payments for online short-term loan providers. When you get a direct deposit short-term loan, you’ll have to include your routing number and account number. The lender will use these details to transfer money into your account.

The lender relies on the same information when your payment is due. They request the funds from your bank account on the due date. It’s problematic if you don’t have enough money in your account as the bank could charge you an overdraw fee while the lender charges you a nonsufficient funds (NSF) fee.

Before taking out a loan, make sure you’ll have the ability to repay it on time.

A selection of direct deposit short-term loans you can apply for

Check the websites of any providers you’re interested in to confirm they operate in your state.

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Name Product Filter Values Loan amount Turnaround time Requirements
Tidal Lending
Tidal Lending
$100 to $30,000
As Soon As Next Business Day
Regular source of income, Verifiable bank account, US citizen, Ages 18+
Chime SpotMe overdraft
Up to $200
$200 in qualifying direct deposits into a Chime checking account in the last 34 days
OppLoans Installment Loans
$500 to $4,000
1 business day
Direct deposit, Meet minimum income requirements, Live in eligible state
Comes with the option to change your due date so you won’t fall behind on repayments.
CashNetUSA Loan
Varies by state
As fast as same business day
Regular source of income, bank account, US citizen or permanent resident, age of majority in your state
Sign up for its discount program to get access to coupons and deals on everything from dining out to tax services.
Fast5kLoans Short-term Loans Connection Service
$100 to $35,000
As soon as the next business day
Regular source of income, Verifiable bank account, US citizen, Ages 18+
Get connected with multiple lenders you might qualify with — even if you have bad credit.
LendYou Short-term Loans
$100 to $2,500
Same business day to 1 business day
$1,000+ monthly income, direct deposit, US citizen or permanent resident, ages 18+
Get offers from potential lenders in minutes by filling out just one online form.

Compare up to 4 providers

Features of direct deposit short-term loans

Not all short-term loans are the same. These are the features you should look for when comparing your options.

  • How long it takes to receive your loan. After it’s initiated, a direct deposit takes hardly any time to go through, so even small variances in processing time make a difference. Short-term lenders don’t take the same amount of time to process applications, and many don’t work outside of business hours or weekends.
  • The loan amount. Borrow different amounts depending on state laws and your eligibility, but short-term loans typically come with low minimum amounts.
  • Fees. While state regulations oversee payday loan administration, you still have to pay attention to the fees charged over the course of the loan. Keep in mind these fees will vary considerably between lenders.
  • Store locations. This isn’t a concern if you’re applying online and want to receive your loan and make repayments via direct deposit, but if you want to deal with your short-term lender in person, its network of store locations will be a relevant factor.

Be on the lookout for loans that claim to be instant

Benefits and drawbacks

  • Multiple options. There are plenty of lenders who offer direct deposit short-term loans, and people who don’t want to carry out extensive research on their own have the option of turning to loan-matching agencies to apply.
  • Apply from anywhere. As long as you can provide the required information, all you need is access to the Internet to apply for a direct deposit short-term loan.
  • Freedom in spending money. Spend the funds you receive from a short-term loan for just about any legitimate purpose. Use this money to pay bills, to travel or to simply get by until your next payday.
  • Need a bank account. You need a bank account that is authorized to receive direct deposits. Your lender relies on this account to send you your loan and collect your repayments.
  • High fees. Short-term loans tend to charge higher fees when compared to other loans, both in upfront and ongoing costs.
  • Disreputable lenders. Although there are plenty of lenders who are trustworthy, there are some who prey on people with financial issues. Check with your local government to make sure the lender you apply with is abiding by state laws.

If you can’t pay by your next check, consider an installment loan

Is there anything you should avoid?

  • Avoid borrowing more than you can afford. If you feel you might not be able to repay a loan on time, avoid taking one out in the first place. A late or missed payment could lead to additional and costly fees.
  • Avoid skimming the loan offer document. Before you accept the loan, take time to go through its terms and conditions carefully. This should give you a clear picture of the fees and charges you might have to pay under various circumstances.
  • Avoid bad terms. If you have a loan offer that is extremely costly and full of fees, you’re under no obligation to accept the terms. There are lender-matching services that can help you find a better loan.

If you’re sick of scouring the internet for lenders, let a loan broker do the work for you

Are payday loans available in my state?

Frequently asked questions

How quickly can I get access to funds through a direct deposit short-term loan?

It depends on your banking institution and the lender, but usually you’ll see your funds deposited as soon as the next business day.

Can I apply for a direct deposit short-term loan if I have a bad credit history?

Yes. Most short-term lenders don’t require borrowers to have good credit history as long as they can demonstrate their ability to repay.

What eligibility criteria do I have to meet to apply?

You’ll need to be a US citizen or permanent resident, meet your state’s minimum age requirement, have the ability to repay the borrowed sum and have a direct deposit enabled bank account.

Direct deposit short-term loans give you the ability to apply from just about anywhere, and you can access approved funds no matter where you are as long as there’s an ATM around. Given the number of alternatives on offer, comparing your options before applying is a good idea.

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