These short-term loans can cover you until your next paycheck — but watch out for high fees.
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OppLoans Installment Loans
Easy online application
Long repayment terms
OppLoans Installment Loans
Installment loans with competitive rates from a top-rated direct lender.
Minimum loan amount: $500
Maximum loan amount: $5,000
Turnaround time: 1 business day
Loan term: 9 to 36 months
Must have direct deposit and meet minimum income requirements
Provide information about yourself, including your Social Security number and contact details.
Provide information about your employment or benefits if you’re on welfare or a similar program.
Provide information about your income, including how frequently you are paid and how you receive your paycheck.
Provide information about your bank account and agree to ACH transfers.
Like the application process, the specific requirements you need to meet will vary by lender. However, most lenders have similar criteria.*
Open checking account
Regular source of income
US citizen or permanent resident
Employed or receive regular benefits
At least 18 years old
*Meeting these eligibility requirements does not guarantee you will be approved for a loan.
Though required documents also differ by lender, you’ll generally need to provide the following:
Government-issued ID, such as a passport or driver’s license
Social Security number, alien registration number or Individual Taxpayer Identification Number
Personal contact information, such as your address and phone number
Proof of income, such as a pay stub or benefits letter
Bank account details
What is a payday loan?
Payday loans are small — generally less than $500 — and are meant to be repaid in one lump sum by your next pay date. Because they are geared toward people with bad credit, interest rates tend to be high. The application process typically only takes a few minutes, and you may be able to receive your loan funds as soon as the next business day. But because of the high interest rates, you could end up paying back double or triple the amount you borrowed in interest and fees. And because they’re regulated at a state level, you’ll find that the interest rates, terms and laws vary considerably between states.
How are payday loans different from other types of credit?
Payday loans have some of the shortest terms and highest APRs, which make them one of the most expensive forms of credit available. These four points are the main differences you’ll find between payday loans and other types of credit:
Higher rates and fees. Payday loans have much higher APRs than other forms of credit. Most states regulate how much a lender can charge, but this may still result in an APR over 300%.
Shorter loan term. Because payday loans are designed to be short-term solutions to financial shortfalls, you generally won’t find a loan that extends beyond six months, although terms differ by state.
Bad credit accepted. Payday lenders often don’t conduct a credit check through the traditional credit bureaus. However, you still need to meet other requirements — for example, a steady source of income.
Lenders charge a fixed fee that varies based on your state laws and the amount you borrow. In general, it can be anywhere from $10 to $30 for every $100 borrowed. This results in a high APR that can often be 300% or more. If you decide to borrow, be sure to read over your loan agreement carefully. It should outline the total cost of your loan as well as any fees you may have to pay when you borrow.
5 common fees charged by lenders
Like all aspects of a payday loan, the fees a lender can charge will vary based on the laws of your state. However, these are the top five most common fees associated with borrowing a payday loan.
Late payment fees. A lender may charge a late fee if you fail to make a repayment. The exact amount you can be charge will depend on state law, and some lenders even offer a short grace period before charging you a late fee.
Returned check or non-sufficient funds (NSF) fees. Also regulated by state law, lenders often charge you a fee if your check doesn’t clear or they are unable to withdraw your repayment from your bank account.
Rollover fees. If you roll over your loan — meaning you borrow an additional loan with the same lender — it may tack on a rollover or renewal fee that you need to pay on top of everything else you owe.
Bank fees. Although not a fee directly charged by a lender, you may have to pay an overdraft fee if your lender attempts to withdraw money and there isn’t enough in your account to cover your repayment.
Prepaid debit card fees. Some lenders offer prepaid debit cards, but be aware that you may be charged charge application fees, monthly fees and payment fees. Research the total cost associated with the card before you sign up.
Will I have to pay interest?
Not usually. Payday loans have a high APR, but it isn’t because of a high interest rate. APR is an expression of the loan’s total cost as a percentage, which includes both interest and fees. Since payday loans have such short terms — sometimes as little as just seven days — there’s not enough time for interest to add up to a profit. When it comes to payday loans, a high APR is a reflection of the loan’s high fees, not its high interest rate.
It depends on where you live. Some states prohibit payday loans altogether by enforcing a cap on interest rates, called a usury law. Others restrict how much payday lenders can charge or impose other regulations to protect borrowers. Unfortunately, many states allow payday lending without enforcing heavy regulations. You can browse payday loan regulations by state or view our loan-by-city directory to find out which options are available to you.
Are payday loans available in my state?
Are there any restrictions on how I use my loan funds?
While you can use your loan funds for a variety of purposes, there are some restrictions in place on how you spend your loan. Loan funds can’t be used to pay for anything illegal, and you typically can’t use them for gambling or college expenses, either. Other restrictions may vary by lender — so check with yours to ensure you aren’t violating your loan contract when you spend your loan.
What should I consider before borrowing?
Before you commit to a lender, be aware of some of the drawbacks associated with borrowing a payday loan:
Extremely high costs. Cash advances are notorious for their high APRs — 300% or more, depending on how much you borrow and your repayment terms. Read your loan agreement carefully and create a budget to ensure you can repay your loan.
Potential debt cycles. Payday loans are known to lead to a cycle of bad debt. Make sure you don’t take on a loan you can’t afford by confirming that you’ll have enough to repay your loan on its due date.
Complex loan contract. All lenders are required to provide you with a contract that outlines the total costs of your loan. Read it carefully so you know exactly what you’ll have to pay, and if you don’t like it, you are under no obligation to sign.
Continuous payment authority (CPA) agreements. Also known as a recurring payment, this allows payday lenders to charge a payment to your debit or credit card based on how much it believes you owe, whether or not you’re able to afford that payment.
Must read: A warning about payday loans
Payday loans are banned in more than a dozen states — and heavily regulated in even more — with good reason: Payday lending is one of the single most predatory forms of credit available and can easily ruin your finances when you’re already in a pinch.
When APRs reach over 1,200%, it’s glaringly clear that these seemingly quick fix-it loans are anything but. State regulations are put in place in order to protect consumers. Racketeering laws, criminal usury statutes and even state constitutions are used to cap loan rates.
Ultimately, these protections are put in place to help borrowers avoid a debt spiral that payday lenders set them up for. Even former President Barack Obama spoke out against payday lenders during his presidency, accusing them of being predatory and trapping borrowers in a cycle of debt.
Before you dive into a product marketed as a one-stop financial Band-Aid, consider your alternatives. Though they aren’t significantly better, installment loans can come with slightly less egregious terms and more manageable payments. And while it may requires a level of humility and openness, asking to borrow from friends or family could be another possibility.
You can also look into alternatives to borrowing. Social services may be available in your area to those in need. Even if you aren’t sure if you qualify, it’s worth researching local assistance programs for food, housing and other necessities. These services may also be able to help you identify and address any structural issues that can keep you in debt, such as a lack of a budget or overspending.
Though you may not have a lot of extra time, a side gig could also be an option. Ideas include driving with a ride-share service like Uber, walking dogs, participating in research studies or even taking online surveys to earn more cash. If you find yourself regularly needing small amounts of money to last you through the week, consider exploring ongoing freelance opportunities in your area of expertise — Upwork and Fiverr are a few places to start.
Payday loans have both a high rate of default and repeat borrowing, which could trap you in a debt cycle and even more financial distress than when you started. By researching your many options, you may be able to avoid getting caught in dangerous lending while still getting the money you need.
How do I repay my payday loan?
How you repay your loan depends on the lender you apply with. Here are three of the most common repayment methods:
ACH withdrawal from your bank account
Post-dated check cashed on your due date
Manual online payment made from your bank account
Make sure you understand your repayment terms before signing the contract. Some lenders may only set up renewal or roll over fees on the day your loan is due, meaning you can extend your loan term instead of paying it off at that time. In some cases, you may get three months or more to repay your payday loan.
Debt collectors sometimes take extreme measures to ensure you repay what you owe, some even going as far as (illegally) threatening you with jail time. While you can’t face criminal charges for defaulting on a cash advance, your lender can sue you for assets to cover what you owe.
A short-term loan secured that uses your car as collateral, usually up to 50% of your car’s value. You hand the car title either to your lender or a third party. If you aren’t able to repay it, your lender gets your car.
A large payment at the end of a loan, common on short-term loans with interest-only repayments.
A check that was written for more than the amount available in the account it’s associated with.
A type of payday loan that requires you to repay it in full once you receive your next paycheck.
When someone writes a check they know is going to bounce. Payday lenders can sue you for fraud if you provide them with a postdated check that bounces.
Also, post-dated check. A check that’s dated sometime in the future, usually when your loan is due.
A company hired by lenders to get borrowers to pay what they owe on an unsecured loan that they are either delinquent on or have defaulted on.
When a lender reviews your credit score and history to evaluate your track record on repaying debts. Many payday lenders don’t run a credit check.
When a borrower misses several loan repayments or has given up on attempting to repay a loan.
When funds are moved directly from one bank account to another. Also referred to as an ACH transfer.
A fixed fee that you pay in exchange for being able to borrow a payday loan.
Charges added to your loan on top of interest, including application fees, origination fees and money transfer fees. Your loan’s APR is an expression of your loan’s interest and fees in a percentage.
An illegal lender who typically charges high interest rates.
Also, due date. The day you’re required to completely repay your loan, in addition to interest and fees.
Active members of the military and veterans have additional consumer protections when it comes to short-term loans. Laws vary by state and can include caps on APRs, maximum loan amounts and restrictions on borrowing before deployment.
A check with a date written sometime in the future, sometimes used as collateral for a payday loan.
When a lender adjusts (usually raises) the interest, fees or loan amount because a borrower is seen as likely to have trouble repaying a loan.
When a lender transfers a loan with overdue payments to a collection agency to recover the amount owed.
A lender willing to work with borrowers that have poor credit, typically charging high interest and fees.
A loan that isn’t backed by collateral, meaning that the creditors can’t come after your house, car or any valuables if you can’t repay your loan.
Local laws that cap the APR on certain loans.
When a lender is allowed to take money directly from a borrower’s paycheck after a court order. Typically after a borrower is sued by a lender for defaulting on an unsecured loan.
States have different regulations in place regarding waiting periods and rollover loans. If it’s legal in your state, your lender may offer the option of paying a fee to lengthen your loan term, which is typically referred to as renewing or rolling over. The fee usually isn’t what you have to worry about, however: It’s the mounting interest over a longer term that can make your loan unaffordable. Before you roll over your loan, consider the potential costs to make sure you aren’t trapping yourself in a cycle of debt.
Payday lenders generally don’t send your information to the main credit reporting agencies — Equifax, Experian and TransUnion. However, they may send information on your loans and repayments to smaller credit reporting agencies, like Teletrack or LexisNexis.
The main danger to your credit scores is repayments. If you’re late on or miss repayments, your credit score could be negatively affected. Your lender may choose to take legal action to bring in unpaid loans or pass your loan on to a debt collection agency, which will affect your score.
In short: It probably won’t help your credit, but it could hurt.
Check the lender’s state licenses, online reviews and contact information. If you can easily find out how to get in touch with a represenative and find its license to operate in your state, then your lender will likely be above-board. However, it still pays to be careful. Some scams have been known to adopt the logo and website design of popular lenders. Always confirm that the lender you choose is the real thing before submitting any personal information online or over the phone.
An ACH authorization gives a lender permission to withdraw money from your checking or savings account. Unless the lender allows you make repayments by check, you will need to sign an ACH authorization. But before you do, make sure you know how much will be debited and on what dates, whether this amount will repay your loan or simply renew it and how to revoke the authorization.
Lenders will ask for your bank account details, such as account number and routing number, to know where to deposit approved funds, process repayments and confirm you have an operating bank account, which is a requirement for most lenders.
A lender or debt collector can only garnish your wages if it has obtained a court judgment. A court judgment could be the result of you failing to repay the loan and then disputing the lender or collector after you’ve been sued to collect the losses. If someone is threatening to garnish your wages and you’re unsure if they can, seek the advice of a lawyer or nonprofit credit counselor.
Aliyyah Camp is a publisher helping folks compare personal, student, car and business loans. Prior to joining Finder, she ran her own personal finance blog and wrote for numerous finance sites. Aliyyah earned a BA in communication from the University of Pennsylvania. She regularly attends industry conferences to stay in the know about market changes that can affect consumers. When she's not helping people with their personal finances, you can find her at the movies or going for a run outdoors.
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