Payday Loan Information

By Shawn Lee Martin


payday loan informationIn today’s world of high-interest short term loans, we here at Help With Payday Loan Debt decided to add a page containing a complete guide to getting and paying off a payday loan

We will cover the different types of payday loans available and how they rate against the state by state payday loan laws.

We will also cover information on what  payday loan traps are and how to:

  • Recognize them
  • How to avoid them.
  • What to do when caught in one.

So many people are getting in trouble with these loans and the more information we can post on our website about them the better armed you, the customer, will be!

[  See our choice for eliminating payday loan debt!  ]

 

 

Are payday loans legal?


That depends on the state you live in. Thirty-Two States Authorize High-Cost Payday Lending and 18 states have either banned them completely or have restrictions on them.

You can check out the laws where you live by clicking the link below:

Legal Status of Payday Loans by State

 

 

What is a payday loan?


In general a payday loan is a high-interest, short-term loan that will automatically take the total amount of your loan out of your bank account plus a high-interest rate and fee charges on your next payday.

This usually adds up depending on the state to around $75.00 per $250.00 borrowed on a two-week loan.

As you can see the interest and fee and interest rate is large, but if you pay the loan total off on your next paycheck and be done with the loan you will be alright.

The key here is to pay off that loan in a one-time lump sum payment, do not ever extend a payday loan or take out a new one to cover a current payday loan payment.

These last two points are part of the payday loan trap that exists with these types of loans, and you can read about those below.

Let’s take a look at the different kinds of payday loans available in the United States today.

There are basically two types of loans available and they are completely different entities with their own unique rules and lack of rules.

 

 

Brick and Mortar Payday Loans


These are the storefronts you see in your town.

Their legal status will vary from state to state depending on the state you live in.

Some of these stores can also offer other services like insurance quotes and will even do your taxes at the end of the year.

They basically work on the premise of you post dating a check for your next payday that will cover the cost of the loan, the interest of the loan and the original balance of the loan all combined into one payment.

Example:

  • Payday loan amount on a 2-week loan: $250.00
  • Interest charge $60.00
  • Fees $15.00
  • Total payback $325.00 on your next payday

Your payment will be electronically deducted from your checking or savings account on the due date.

 

Online Payday Loans


These loans are pretty much the same as brick and mortar payday loans with the exception being these companies can be based anywhere in or out of the United States and will do business even where banned.

They have a unique payback agreement being they will only take the interest and counter fees due on the original loan out of your bank leaving you with the original loan balance plus another batch of counter fees and the new interest charge for the next loan period.

You need to call the company and specify what amount you want applied to the loan 3 days or more prior to the payment due date.

Example:

  • 2-week payday loan  $250.00
  • Interest $60.00
  • Counter fees $15.00
  • Total amount due on next payday $325.00

If you do not inform them that you would like this complete loan total or partial payment amount taken out of your bank account on your next payday, they will take out the interest and fees payment of $75.00 leaving the original loan balance of $250.00 remaining.

They will then add a new fees and interest charge to the remaining balance and your new loan will again be the exact same as the one you just made the payment on.

In essence, you just borrowed $250.00 for two weeks at a charge of $75.00 and your balance after the payment will be $325.00 again.

As you can see, this is a payday loan trap and it is easy to get caught in it and extremely hard to get out of.

Always make sure that any payday loan you take out is paid in full on the first due date, PERIOD!

Rule of Thumb!


  • Always pay your payday loan off in full on the first due date, PERIOD
  • You must be very careful with online payday loan companies as they are ruthless and many are less than legit.
  • You really have no recourse with online companies that are not based here in the USA. It is best to avoid these loan companies completely.
  • Never extend a payday loan for any reason
Payday loan traps are the result of three things:

 

  1. taking out a payday loan to make another payday loan payment or pay other debts while you have an active loan running
  2. You do not maintain an online payday loan and keep getting hit with the interest and fees charges, over and over.
  3. You extend your payday loan or take out multiple loans

Your bank account can also get trashed with overdrafts due to the loan companies trying to take out their payments so it is a must to have the loan paid off in full on the first due date PERIOD!

If you do find yourself in over your head with payday loan debt get hold of a payday loan consolidation company ASAP, even if you only have one active payday loan. They will get your finances back under control quickly and get you back on track.

 

[  See our choice for eliminating payday loan debt!  ]

Summary


We hope this information helps people who are thinking about taking out one of these loans.

They can help out a person financially and they do work if you use them properly, but you must remember they can also become your worst enemy by not following the proper way to deal with them.

Good luck and thanks for stopping in!

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40 thoughts on “Payday Loan Information”

  1. Pay day loans are legal in my state of North Dakota. I think they’re awful things that make no sense financially. When I think of an individual who’d take out a pay day loan, someone who can’t pay their immediate bills comes to mind. Bottom line: they’re broke. So, they take out a pay day loan to not be broke. Yet they find themselves even more broke the next pay day because they have to repay the loan plus outrageous fees and interest. So, how did they help their problem of being broke? They didn’t. They just made the situation worse.

    It’s good you’re offering solutions rather than adding to the problem.

    1. Hi, Renee!

      Those people sure do end up with payday loans, but it can also be people who have no credit due to health and need medice, or a mother trying to take care of her kids, etc…

      No matter what the reason., we will help those who need it. 🙂

      Thanks for stopping by and please help spread the word we are here!

      Shawn>>

  2. What percentage of people actually pay off their payday loans in full on the due date? It seems to me that these places exist and make so much money so easily because this ISN’T what happens. People are strapped and just hop from one place to another and not having an emergency fund in place.

    1. Hi, Sarah!

      Oh, you are so right in asking this question because this is exactly how they make huge profits. They are hoping you will extend your payday loan at least once or take out several more of them.

      The average borrower will extend a loan 4 times and these companies clean up because of it.

      Thanks for bringing this up and thanks for stopping by!

      Shawn>>

  3. This article about payday loan information was a real eye opener for me. When I was a kid, many of these practices would be illegal. My how the times have changed.

    Shawn, your information about payday loans will no doubt help a lot of people. I think it’s advisable not to get them, if you can in anyway avoid them. But if you must get a payday loan, pay it off quickly, just as you advise.

    1. Hi and thanks for stopping by!

      I agree, no loan is the best way to go, but even if you do take one out pay it off on the first due date!

      Shawn>>

  4. Hi

    Great website, I’m sure this will help a lot of people in financial difficulty. The only thing that wasn’t clear is what role your company plays … are you are financial organisation, or an intermediary? Are you able to talk to lenders on behalf of your clients, as they don’t usually talk to third parties regarding personal information.

    Otherwise, nice structure, clearly laid out and easy to navigate!

    Kind regards,

    Nik

    1. Hi, Nick!

      Great questions!

      We are a consolidation company and yes, we can talk with thew lenders after we are grated permission by the borrowers which is all part of signing up for our services.

      We basically take over the borrowers loans and make the payments. They borrowers no longer have to deal with the companies directly.

      Thanks for stopping by!

      Shawn>>

  5. Thank you for the information about payday loans, glad I can find a place I trust to keep checking in for more information about this stuff. I think you need more content as there were a lot of questions I had that went unanswered, thank you sir!
    Have a great day

    1. Hi, Steven!

      Please drop us a line, you can use this form and let us know what questions we did not address for you so we can improve our site.

      Sorry you did not get the information you were looking for!

      Shawn>>

  6. Hey Shawn, very interesting website that you have here! I agree with you on the high interest rate, and the only way to use them is if in case of an emergency and then to pay it off in full and not reloan. Unfortunately the majority of people that do this have more than one payday loan out and they have a circle that they do every pay day or when they get their social security. People go from one place to the other and they have no idea or do not want to know of actually how much they are paying in fees. They are trapped. The payday places serve a good purpose when you need extra cash. I actually work for one of the bigger companies and to tell you the truth they do rip people off, yet people in turn do not payback, they give us fake information, and we can never find them. Right now working for this establishment is a job for me…it pays my bills, but I am definitely trying my best to get out of this work environment….I see and hear to much that I really don’t care to know

    1. Hi, Angela!

      Thanks so much for stopping by and giving us some insight on the other side of the counter.

      I know there are rats in every group and I am glad you understand both sides of these loans. They do serve a purpose, they really do, IF they are used properly.

      Please let people who really need help with payday loan debt know we are here. 🙂

      Shawn>>

  7. Hello here. When I read your article, I got scared. Why? Because when people turn to this type of loans, they supposed to be in real debt. To pay one third amount just for one day is a crime. What is more scary, if you do not pay next day, high fees sum up and bye-bye. I think that you doing great job informing your visitors about this possibility and consequences of it.
    Could you offer better way for these desperate guys, who look for every option how to rid from debt?
    I wonder if you heard about Wealthy Affiliate. This transparent and real training website with wonderful community can show enormous possibilities. Choosing your hobby, learning how to create website, write about your passion and spread it to the world, I guess it is a best option to get of misery.
    What people need is computer and Internet. There, in Wealthy Affiliate is enormous amount of knowledge how to run business online.
    I found this website, when I looked for scams. I never thought that I will be lucky one, who can turn her passion to activity. It lets to plan my time.
    Sorry, that I brag about this wonderful training platform, but after reading your article, I wanted to share about other options, how to live stress free life, how to reach your goals thanks to Wealthy Affiliate.
    I wish that your visitors would return to your website hungry for knowledge and ready to start new lives.
    All the best, happy writing, Nemira.

    1. Hi Nemira!

      Thanks for stopping by and yes, WA is a great training place for home businesses. If only we could scoop everyone up and teach them all at once it would be awesome!

      The best we can do is teach!

      Shawn>>

  8. Hi Shawn, thank you for this well thought information which goes a long way on advising people on how to avoid financial ruin. I agree with you 100% that if you really have to get a pay day loan make sure you pay it back in full the first time and then make a plan to never have to use one again.

    Even if it were that some people can’t get approval from banks for loans or overdrafts and are sometimes in desperate need of money this kind of loans should be avoided completely, they end up to no good.

    I have witnessed a family completely wiped out by bankruptcy and at most most of these loans are very expensive.

    Thank you for giving us a cutting edge advice on financial literacy which majority of us lack.

    Thank you,
    Violet.

    1. Hi, Violet!
      Looks like you have seen first hand how bad it can get when you are caught in the payday loan trap!
      Thanks for sharing your story and keep spreading the word that we are here to help anyone who needs it!

      Shawn>>

  9. Thank you so much for providing this information. My sister was a single mother who got in a lot of trouble with these payday loan companies many years ago. The end result was her having to declare bankruptcy. That was about a decade ago. and so she has managed to bounce back 110% from that dreadful mess, but it was a long, hard, slow process. Thank you for sharing to help others avoid these traps!

    1. Hi, Faith!

      So sorry your sister had to go through all that.

      At least she has a happy ending!

      Thanks so much for stopping by!

      Shawn>>

  10. In my opinion companies that offer these types of loans are criminal!

    $75 on a $250 loan in just 2 weeks! Are you serious? This is daylight robbery. That’s the equivalent of 780% over a year!

    If you had a bank overdraft that chared 15% per annum let’s say – then your interest charges over that same 2 week period would be $1.44 (compared to $75).

    Put another way: A bank overdraft (at 15%) of $250 would cost you $37.50 for the year in interest and maybe another $50 to $100 in fees for a total cost of around $90 to $150. With one of this pay day loans it would cost you a whopping $1,950!

    I 100% agree with the author that if you really have to get a pay day loan make sure you pay it back in full the first time and then make a plan to never have to use one again.

    I understand that some people can’t get approval from banks for loans or overdrafts (if you can definitely use this option first) and are sometimes in desperate need of money but do what you can to avoid one of these loans.

    I remember once seeing a sign that said in big letters “Superloans – only 6% interest rate” which I thought sounded really good for one of these loan shark companies. And then I get closer to the sign and noticed, in very small writing underneath “per day”. So that equated to over 2,000% interest in the year!

    1. Hi, Nate!

      You know your numbers and you are spot on!

      These companies hope and pray you need to extend your loan because that is where they really make the money.

      Thanks for stopping by!

      Shawn>>

  11. Your Payday-loan-information format is very user friendly. I took the tour on each page and you offer so many ways to help people who are in trouble financially.
    Overall you have covered all of your bases and the sign up form is very easy to follow. I like that you have provide a phone number for people to call. There is nothing worse then getting a send an email or put your information in and someone will get back to you. I myself would want to speak to someone in person. I think this is a more personal touch, especially on subject matter that’s very personal such as someone’s debt.

    I have a Question: My father has become disabled, this just happened to my Dad and he can no longer work at his business. He has always had a business line with his bank for years and always paid it in full at the end of each month. He is 63 he has no other income now except for my Mothers Pensions, but he’s left with the loan that he still has to pay and it’s making his life and my moms very hard. He won’t go to the bank, because he has always paid his debt and he’s afraid because, 1, of his age and 2. that he is disabled now, He believes that the Bank will take his credit card and leave him with no credibility at all. His credit is still perfect, but it’s because he and my mom go without and take the payment out of their food and medication budget. What can they do?

    Great Loan format to help people. Thanks, Sharon

  12. Hi, Sharon!
    Thanks for stopping by!
    If this loan is current and not a payday loan all he can really do is see if the bank will re write the loan for a smaller monthly payment.
    If this is a payday loan and it is over $700.00 we can help him.

    Shawn>>

  13. Hi Shawn,
    Great information post on payday loan. It never a good idea to get a loan. The interest to payback is so high. The best strategy is still saving for a rainy day. If urgently require cash I believe the best is to best borrow from friends or close ones. It a very good awareness.
    Thanks.

  14. Anytime someone is thinking about getting a payday loan, it is best to know exactly what it is and what you’ll be paying for. Great job of explaining everything about payday loans and why they should be used. Very helpful resource I will be sure to consult every now and again. Thank you for this post, I will be looking forward to more in the future.

    1. Hi, Kyle!

      Thanks for stopping by.

      I hope this site becomes the place to stop at for anyone thinking about a payday loan. We want to inform them all 🙂

      Shawn>>

  15. Glad I was able to get information on payday loans.
    I haven’t had to deal with them at my young age, but I hope that I’ll never be in a situation where I wouldn’t know how to pay it off, although I do live in a state where they are allowed.
    Thanks for the information!

  16. I really love the information that you provided, because I have some experience with payday loans too due to some emergencies and I regretted it. I’ve learned my lesson, and have saved money for emergencies, and will never recommend payday loans.

    I am glad that your passionate about enough to inform people like us to be more financially stable and disciplined, and even if we have emergencies and stuff, do our best to avoid them.

    They are SHARKS preying on the fishes.

    1. Hi there!

      I am so glad you learned from that experience and make alternate plans for the future!

      You are a success story and we like those kinds of happy endings.

      Our goal is to educate and we will keep doing it until the need is gone 🙂

      Shawn>>

  17. I read your article about Payday Loan Information. I am aware of these kinds of loans and the way they trap people.It is always best to avoid them and never think of them as an alternative to pay your bills. The different kind of payday loans that you have mentioned is really a very valuable point. It helps to understand what you should do and what you shouldn’t do. Overall I liked your article.

    1. Hi there!

      Glad you liked the article and I hope it helps you in dealing with payday loans and payday loan debt?!

      Shawn>>

  18. I had a negative experience with payday loans and it is great to know that people like you are out there to help people like me find a light at the end of the tunnel. Not being able to pay back money you owe causes a lot of stress and really wears on your self esteem. Thank you for offering help to people who may not be able to find a way out otherwise.

    1. Hi, Tmamara!

      You hit the nail on the head with the statement about stress.

      It can really be a drag dealing with payday loan collectors!

      Thanks for stpping by and please help spread the word that we are here to help!

      Shawn>>

  19. Hello, Shawn. I almost took out a payday loan when I was in my 30’s. I just needed the money to fix my car so I could get to work every day. I spoke with a few people at work and they told me not to do it, that I would get in debt with them. So, they took up a collection to get my car fixed without the payday loan. I worked with a great group of people that helped me out in my time of need. I fill bad for those that feel that is the only way to go. Great article!

    1. Hi, Peggy!
      I am so glad you guys found a better way to fix the car!
      It is so easy to get buried in these loans and your co-workers gave you great advice!
      Thanks for stopping by and sharing your story!

      Shawn>>

  20. I’d never heard of a payday loan before but you explain the concept very well. Having said that, they do sound dangerous and I can see why some states ban or restrict them. It seems like the potential to get over your head with the high interest and associated loan fees is high. Especially if the company is an overseas based one! Have you ever taken out a payday loan?

    1. Hi, SC!

      Yes, I have been on both sides of the coin and had to be bailed out by a payday loan consolidation company. You could say I have seen the bad side of these loans.

      Thanks so much for stoppi9ng by and help spread the word that we are here to help anyone that needs it with this kind of debt!

      Shawn>>

  21. Hello Shawn. This is a very informative page. I know someone who takes out payday loans all the time and all he does is get debt piled up higher than the amount of money that he makes. I’ll refer him to your site and hopefully he will check it out so maybe he’ll use his brain and stop screwing himself 🙂

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