How direct deposit short-term loans work

How to get a loan deposited into your bank account.

Last updated:

We value our editorial independence, basing our comparison results, content and reviews on objective analysis without bias. But we may receive compensation when you click links on our site. Learn more about how we make money from our partners.

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.

Our top pick: CashUSA Installment Loans

  • Min. Loan Amount: $500
  • Max. Loan Amount: $10,000
  • Turnaround Time: As early as 1 business day
  • Loan Term: 90 days to 72 months
  • Requirements: $1,000+ monthly income after taxes, valid checking account
  • Bad credit is OK
  • No application fee
  • Debt education resources

Our top pick: CashUSA Installment Loans

Explore its online education center to get tips on budgeting, how to prioritize your bills and more.

  • Min. Loan Amount: $500
  • Max. Loan Amount: $10,000
  • Turnaround Time: As early as 1 business day
  • Loan Term: 90 days to 72 months
  • Requirements: $1,000+ monthly income after taxes, valid checking account
Promoted

How does a direct deposit short-term loan work?

Online short-term loan providers rely on the ACH system to disburse funds and collect payments. When 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. This can be a problem if you don’t have enough money in your account as the bank could charge you an overdrawing fee while the lender charges you a non-sufficient 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.

Updated October 23rd, 2019
Name Product Filter Values Max. Loan Amount Turnaround time Requirements
$5,000
1 business day
Direct deposit, meet minimum income requirements
Comes with the option to change your due date so you won’t fall behind on repayments.
$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.
$2,600
1 to 2 business days
Active checking account, regular source of income, email address
Get access to tools to help you plan a career move, make some extra cash or search for a better-paying job.
Varies by state
1 business day
Regular source of income, bank account, US citizen or permanent resident, ages 18+
Sign up for its discount program to get access to coupons and deals on everything from dining out to tax services.
$15,000
Same business day to 1 business days
$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.
$50,000
Same business day to 1 business days
Employed, $800+ regular monthly income, checking account, ages 18+, US citizen
Fill out a simple online form to compare offers from several lenders that may be able to help.
$1,000
1 to 2 business days
Bank account, email address, phone number, US citizen or permanent resident, ages 21+
Plus, get access to check cashing, cell phone top ups, bill pay and more at one of its many storefronts.
$10,000
As early as 1 business day
$1,000+ monthly income after taxes, valid checking account
Explore its online education center to get tips on budgeting, how to prioritize your bills and more.
$250
As soon as the next business day
Checking account with ACH, proof of income, Social Security number, ages 18+
Get rewarded for making on-time repayments with better rates and terms on future loans.

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 do not take the same amount of time to process applications, and many don’t work outside of business hours or weekends.
  • The loan amount. You can 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 the administration of payday loans, 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. You can spend the funds you receive from a short-term loan for just about any legitimate purpose. You can 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

Was this content helpful to you? No  Yes

Ask an Expert

You are about to post a question on finder.com:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder.com provides guides and information on a range of products and services. Because our content is not financial advice, we suggest talking with a professional before you make any decision.

By submitting your comment or question, you agree to our Privacy and Cookies Policy and Terms of Use.

Questions and responses on finder.com are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.
Go to site