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What is a payroll loan — and what should you look for in a lender?

What to know before taking one this quick but expensive option.

If you’ve found yourself in a cash crunch, you may think that a payroll loan could help. But take a good look at the lender: Providers have an array of fees and terms that’ll be important factors in your ability to pay back the loan.

What is a payroll loan?

A payroll loan is a short-term loan — typically no more than $1,000 to $1,500 — that you usually repay when you receive your next paycheck, also known as a payday loan.

A payroll loan can get you cash easily, but it can also be very expensive, especially if you aren’t able to pay it back in full when it’s first due.

Compare online short-term loans

Check to see if any of these lenders provide loans in your state.

Name Product Filter Values Loan amount Loan Term Turnaround time
B9 pay advance app
Up to 100% of your salary
Not Stated
Withdraw 100% of your paycheck with no extra fee for instant funding.
OppLoans Installment Loans
$500 - $5,000
9 to 24 months
1 business day
Comes with the option to change your due date so you won’t fall behind on repayments.
$1,000 - $25,000
2 to 3 business days
Get a fair loan designed for immigrants and nonresidents.
CashNetUSA Loan
$100 - $1,800
Varies by state
As fast as same business day
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 - $35,000
6 months to 6 years
As soon as the next business day
Get connected with multiple lenders you might qualify with — even if you have bad credit.

Compare up to 4 providers

How to compare short-term loans

It’s an excellent idea to shop around before settling on a payroll loan or loan provider. Here’s what to look for when considering different lenders.

  • Reputation

    Though reputable payroll loan lenders do exist, the industry as a whole is known for harboring seedy providers. Watch out for deceptive lenders and loan scams.

    To protect yourself, thoroughly vet lenders and read customer reviews on reputable sites like the Better Business Bureau (BBB) or Trustpilot. If you’re considering an online lender, contact them for their physical address — any legitimate lender will readily give you details about themselves.

  • Interest rates

    Compare interest rates among multiple lenders — a seemingly attractive rate might be beaten by a wide margin elsewhere.

    Lenders often include an APR (annual percentage rate) which takes yearly interest charges and fees into account. However, some lenders express their rates as monthly percentages. Remember that if a loan’s monthly interest rate is 20%, its annual rate is 240% (or 20% times 12).

  • Fees

    Many payday lenders don’t charge interest, but fees. You may be on the hook for origination, processing and insurance fees, depending on the type of loan.

    Before taking out any loan, read the lender’s terms and conditions thoroughly. Be sure that you understand every fee you’re asked to pay, and ask for clarification if you don’t.

  • Repayment terms

    Beyond reading the loan terms for fees, also look out for the loan’s requirements. Requirements include prepayment penalties, the date the loan is due and consequences if you fail to repay the loan.

Pay advances from an employer

Rather than taking out a payday loan, you might want to consider a pay advance. Some employers offer interest-free pay advance programs.

Even if yours doesn’t you might be able to get more affordable financing by using a pay advance app like Earnin. These typically allow you to access wages you’ve already earned and charge minimal fees — if at all.

Pros and cons of payroll loans


  • Easy to qualify. Lenders rarely check credit histories for these types of loans, and the requirements are minimal.
  • Get cash quickly. Many applications can be complete in minutes, and some lenders can get you the cash you need within one business day.
  • Bank account not always necessary. Some payday lenders are able to provide financing even if you don’t have a checking or savings account.


  • Expensive. Finance charges can be $15 to $30 per every $100 you borrow, depending on your state — which means if you take out a $500 payroll loan, you could pay $150 in fees.
  • Short terms. Payroll loans are typically due in two weeks.
  • Cycle of debt. Many borrowers fail to budget for repayment and end up taking out more loans just to repay the debt, allowing fees

Because it can be difficult to pay back an expensive payroll loan, you may want to look for other loans. For example, if you can qualify for a personal loan, you’ll find they are less expensive and often provide longer repayment terms.

Stuck in a payroll loan cycle? Here are ways to dig yourself out

Can I get a payroll loan if I don’t have a bank account?

Yes, you can get a payroll loan if you don’t have a bank account through two options:

  1. Prepaid debit card loans. You apply for your short-term loan either online or in a store, and if you’re approved, they transfer your funds into an eligible loan account. They then register a prepaid debit card with that account, and either hand it to you in-store or mail it to you.
  2. In-store loan. You apply for your short-term loan either online or in a store, and if you’re approved, you can pick up your money at the store.
  3. Cryptocurrency loans. If you have cryptocurrency or are willing to borrow in bitcoin, you might be able to qualify for quick funding regardless of your credit score and income.

How to get a loan without a bank account

Bottom line

Payroll loans can be easy to get but they can be extremely expensive. Because payroll loans have short terms and high fees, it can be tempting to renew them and get trapped in a cycle of debt.

To avoid this, consider alternatives like government services, low-interest payday alternative loans from a credit union or borrowing from friends and family. If those aren’t viable alternatives for you, compare your short-term loan options and be sure you can pay off the loan on time.

Frequently asked questions

Are payday loans available in my state?

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