Editor’s Note: Even the best online payday loans are generally a bad idea overall. If you are looking for a payday loan to pay bills or other expenses, we strongly recommend exploring other options, such as getting a personal loan instead. Before applying for a payday loan for an emergency expense, we recommend considering a cash advance on your credit card or an overdraft line of credit.
If you’re considering a payday loan because you have inconsistent paychecks, we recommend checking out some new apps that help even out paychecks. Many credit unions offer alternative payday loans that are less expensive. If you already have payday loans and continue to roll them over, we recommend contacting a credit counseling agency to help get you out of debt.
CashNetUSA tops our list of the best payday loan companies because its application is quick and its rates are the same or lower than other lenders.
We don't recommend you get a payday loan, but if you have to then try CashNetUSA first.
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Best payday loan lenders
Unreliable or inconsistent cash flow are problems many Americans experience from time to time. Many often wonder if a small short term loan is the only way out of a financial rut. Payday loans may seem like the obvious choice that will help you survive until your next paycheck. As there is no credit check with payday loans they attract people with bad credit because payday loans feel like the only option.
There are some minor advantages to taking out a payday loan – a small, emergency loan to be paid back on your next paycheck. They are quick and work even for those with bad credit, with many companies offering a payday loan on the same day of applying. These benefits come at a steep cost though, with the high repayment rates being the biggest negative. These emergency loans should only be taken as a very last resort. Just to be clear – always look for alternatives to even the best payday loans if you can.
We have compiled a list of the best payday loan lenders for those times when a real emergency hits and bad credit prevents you from taking out an emergency loan from elsewhere. To grade these payday lenders we scored them on how quick the loan was deposited into an account, how much interest was added, as well as what other support and services they offer. We have also provided a guide on how to avoid the less scrupulous lenders and also payday loan alternatives for you to consider.
All the lenders we reviewed are direct lenders that comply with all applicable state laws. Even so, again, we really must caution against using these services because they are expensive and carry the risk of trapping you in a cycle of debt where you need to take out new loans to pay off your previous ones.
Each state regulates payday loans differently – some outright ban them. As such, depending on where you live, the costs vary widely.
If you have to get an online payday loan, we recommend that you choose one of these lenders:
1. CashNetUSA: Best overall
Super-efficient delivery of fund with industry-standard rates
Equivalent APR offered: 391% | BBB rating: B- | Trust Pilot rating: 4.6/5 | States: 30 | Physical stores: 0 | Telephone: N | Online: Y
CashNetUSA has been in business since 2005, which makes them one of the more established companies in the payday loans industry.
The company specializes in short-term, single installment loans for customers with low credit scores and also offers lines of credit to be paid back in installments for eligible customers. It is actively operational in 30 states, making it among the biggest of its peers and offers loans to first-time customers of between $100 and $3,000. Be aware though some states have a lower maximum loan amount and customers should check this information before they apply.
CashNetUSA's rates fall into line with industry averages, and it has a very quick processes for approvals and delivery of funds to customer accounts, sometimes within the same business day. It does have some resources to help people trapped in a cycle of debt, with access to online savings programs via its commercial partners, and a wealth of financial education modules that should also be a boon to customers.
- Read the review: CashNetUSA
2. LendUp: Best for poor credit
An attractive and ethical option above other companies
Equivalent APR offered: 391% | BBB rating: A+ | Trust Pilot rating: 4.8 | States: 7 | Physical stores: 0 | Telephone: No | Online: Yes
LendUp is an online loan company that specializes in making smaller loans - both single payment and installment loans - for short periods of time.
It's aimed at borrowers that do not necessarily have a good credit score or indeed any credit rating, with LendUp offering customers a range of tools and pathways to better credit scores, which can result in lower interest rates if the customers continue to use the company’s products.
LendUp was founded in 2012 in San Francisco and is an attractive option, with competitive rates compared to other short-term lending companies, and rewards regular customers who repay loans on time or who take some of its free financial education courses. LendUp's stated aim is to interact with customers ethically and it does not promote ‘rollover’ loans to trap customers in a cycle of debt.
- Read the review: LendUp
3. Check Into Cash: Best for physical stores
Straight forward quote process, but cheaper options available
Equivalent APR offered: 399% | BBB rating: A+ | Trust Pilot rating: 4.4/5 | States: 30 | Physical stores: 1,100 | Telephone: N | Online: Y
Check Into Cash was founded in 1993 in Tennessee. The company is a direct lender with physical stores across 30 US states as well as phone and online services. It specializes in providing online payday loans, in-store cash advances, in-store title loans, and check cashing among other financial services.
It typically serves customers who have come up against unexpected expenses, need to get an advance on a pay check or who have other short-term financial assistance needs. The company offers loans to people with low credit ratings and its loan amounts range from $50 to $1,000, although brand new customers can usually only borrow up to $750 (or their state maximum).
Check Into Cash is a relatively well-known brand and the large number of physical storefronts is reassuring to many customers. Its rates fall well in line with industry averages, and funds can be made available immediately for customers applying for payday loans in person. It is as reputable as any of the major names in the industry, backed up with a clear commitment to best practices and ethical behaviour.
- Read the review: Check Into Cash
4. Check ’n Go: Best for competitive interest rates
Fairly average loan company with industry average rates and practices
BBB rating: A+ | States: 27 | Physical stores: 1,000 | Telephone: Y | Online: N
Check ’n Go began as physical stores before branching out into online loans as the internet became more widespread.
Check ’n Go is operational in 27 states across the US, with well over 1,000 physical storefronts, making it a good option for people who want to deal with the lenders in person.
First-time customers at Check ’n Go can apply to borrow from between $200 to $3,000 for one month, though some states have a lower maximum loan amount and customers should check this information before they apply.
On the face of things, Check ’n Go is a fairly average loan company with industry average rates and practices. It is represented in a good number of states, but by far their biggest advantage is its sheer number of physical storefronts. Many customers with low credit prefer to deal with their loan managers in person, and this also means that funds can be delivered into a potential customer’s checking account faster than over the phone or via an online application.
Check ’n Go has a good rating with the BBB and Trustpilot, and its membership of the CFSA is a positive sign.
- Read the review: Check 'n Go
5. Oportun: Best for free financial resources
Responsible lending at a very acceptable rate
BBB rating: A+ | Trust Pilot rating: NA | States: 12 | Physical stores: 0 | Telephone: N | Online: Y
Oportun has issued over 3 million loans since it began trading in 2005. The company states that it only lends responsibly, meaning that the customers’ ability to make repayments is strongly considered before a loan is made. It claims to offer affordable repayment plans and accept payments in multiple forms, as well as promoting civilized customer service and not hiding any fees. It also offers pathways to improved credit scores via on-time payments and the like.
In terms of interest rates and customer service, Oportun is relatively straightforward and easy to deal with. As a company it espouses only giving loans to those that can afford the repayments and it looks to have policies in place (such as proof of income) to help make this a reality. Its financial education and management resources are free and available to all potential customers and it works with nationwide credit bureaus to help customers with no or very low credit ratings to establish a more advantageous position for the future.
- Read the review: Oportun
6. Rise Credit: Best for building credit scores
Works to make repayments affordable, but more expensive than other options outside of payday loans
BBB rating: A+ | Trust Pilot rating: 4.6/5 | States: 31 | Physical stores: 0 | Telephone: N | Online: Y
Rise Credit states that it looks to work with customers to make repayments affordable and avoid some of the more predatory and exploitative practices of the payday loans industry in general.
Rise Credit has been in business since 2014 and provide loans ranging in size from $4,500 to $5,000, as well as operating in 31 of the United States.
Rise Credit is a relatively ethical loan company that backs up its products with plenty of resources to help customers manage their finances. Its rates, while still more expensive than other options outside of payday loans, are competitive and its lack of prepayment penalties and pathways to better credit scores are definitely a plus.
- Read the review: Rise Credit
7. Speedy Cash: Best for low loan amounts
Lower charges but slightly lower loans amounts too
BBB rating: NA | Trust Pilot rating: 4.6/5 | States: 14 | Physical stores: 200 | Telephone: Y | Online:
Speedy Cash began operations in 1997 in California and has grown to operate in some 28 states as of the time of writing. As well as developing telephone and online touchpoints, Speedy Cash maintains a good number of physical storefronts, with just over 200 locations across 14 of those 28 states.
Payday loans are available from $100-$500 though these figures do depend on the individual state laws regarding maximum loan amounts. Speedy Cash has a few elements that make them worth considering if looking for a payday loan. Firstly, its rates were slightly lower than average, although the amounts available to borrow were slightly less than other companies in the same industry.
Secondly, it has physical storefronts in half of the 28 states where it is active, which makes it useful for customers who would rather talk to someone in person about their loan application (decisions and delivery of funds also tend to be quicker in general at actual stores). Although it doesn’t have a Better Business Bureau rating, it scores highly on Trustpilot and its membership of the CFSA speaks well of it as there’s at least a nod to ethical behavior.
- Read the review: Speedy Cash
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What is a payday loan?
We’ve all seen them advertised - payday loans seem to be increasingly popular and a quick way to raise money to cover an emergency or see us through to the next pay check. But what exactly distinguishes them from other forms of borrowing money?
To begin with, payday loans are usually for relatively small amounts. Many loan companies start their loans at $50, but it’s typical for people to borrow a few hundred dollars - each state has a maximum amount for this type of loan, more of which later. Secondly, they are expensive. They are usually due to be paid back in one lump sum at the end of either two weeks or a month, and compared to borrowing a larger amount over a longer period of time, the interest rates are very high - often between 100% and 700% Annual Percentage Rate (APR). This is an incredibly expensive option when it comes to borrowing money.
The upshot for many people is that they are available to customers who may not have a high credit rating, and indeed some payday loan companies lend money to customers who do not have any credit rating at all. Usually, all that’s needed is identification, proof of income and a checking account. Sometimes even the first two things are enough to secure a loan.
These loans are marketed differently around the country, but if you’re looking at a cash advance, deferred deposit, deferred presentment, or credit access then you’re basically taking out a payday loan.
Payday loans: How do they work
However a customer is applying, the decision to approve (or decline) is usually a fast one. Once proof of income and identification have been established, it’s usually just a matter of minutes before the decision comes through.
If approved, the customer will then authorize the lender to withdraw money from their checking account once the loan period is over, or hand them a post-dated signed check. Again, the repayment period is usually either two weeks or one month.
The amount a customer can borrow will be subject to two factors - how much the lender sees fit to lend without incurring a huge amount of risk and the maximum loan limits set by each state. In most states, a customer can usually take out a payday loan for anything between $50 and $1,000. Once the paperwork is in order, the money will be transferred to the customer, typically electronically into their checking account. This can take a matter of hours (it is usually much faster if the payday loan is applied for in person at a physical store) or sometimes up to two business days.
Payday loans: Cost
This is by far the most important issue to consider when thinking about taking out a short-term loan. As stated, payday loans are issued more easily than many other types of loan (mortgages, etc), but the stipulation is that the money comes at a much higher price.
It’s very unwise to arrange a payday loan as a first option, and much better to explore all the other ways to raise money before applying for one. Interest rates vary according to personal circumstances and the amount borrowed, but on average, each $100 borrowed from a payday loan company will cost between $15 at the low end and $35 at the higher end (sometimes even much higher than this at less reputable companies).
To break that down, if a customer borrows $100 for two weeks and the charge is $15, that works out at 390% APR. Recent studies put the average cost of borrowing $100 for two weeks at $23.50, which is a very expensive 610% APR.
In an emergency, and if no other possibilities present themselves, this may look like an acceptable price to pay, but customers must be very careful not to trap themselves into a cycle of debt, where they repeatedly borrow more to pay off the fees of a previous loan.
Payday loans: Credit ratings
Payday loans are an attractive proposition to people with very bad credit or perhaps no credit rating at all. Most (though not all) payday loan companies do not check the credit history of the customer, so simply applying for or taking out a payday loan will not usually affect an individual’s credit rating.
Some payday loan companies have schemes where if a customer makes on-time payments, they report this to the credit rating companies so customers can slowly build up better credit (again, this is a risky and expensive way to do this). The downside of course is that if there are missed payments or a customer defaults on a loan, this information also gets reported.
Payday Loans: Non-payments
If a customer fails to make the repayments that were agreed upon, the company will still try and recoup that cash. They will likely work with the customer at first, breaking down installments into smaller chunks or rolling over the loan, but these practices almost always incur extra fees or administration charges so it’s hard for struggling customers to get back on track.
In extreme cases, payday loan lenders will sell the loan to a collection agency, who may be much less understanding about an individual’s circumstances. Court judgments and the like can follow. In short, if you really do have to take out a payday loan, be very sure that the repayments are within your means in the immediate future, as not paying can again drag a person into a cycle of debt that is very hard to escape.
Can installment loans carry extra costs?
A payday loan is typically for a small amount, usually a couple hundred dollars at most, with a high interest rate. If you need a larger amount of money, up to several thousand dollars, an installment loan is an option worth looking into.
Installment loans differ from payday loans by having longer terms and regular payments. With a payday loan, the entire amount comes due at the end of a set period, usually two weeks to a month. Installment loans have high rates – not as high as payday loans but higher than a personal loan or a credit card. Also, like payday loans, there’s no credit check or collateral required to apply.
The Pew Charitable Trust recently published a report on installment loans and how state laws impact them. Like payday loans, each state regulates installment loans differently, though installment loans tend to be less strictly regulated than payday loans.
Pew found that installment loans are about three or four times less expensive than payday or title loans. Often, an installment loan will have payments that are 5 percent or less of the borrower’s monthly income.
This report identified two ways lenders add costs onto installment loans. The first is by adding credit insurance, which can cost up to a third of the loan amount. This is financed into the loans, increasing your monthly payments. Credit insurance ensures the lender is paid if you become ill, injured or otherwise unable to make payments.
Another way lenders increase the amount you pay on installment loans is by adding origination or acquisition fees. This fee is usually a flat dollar amount added at the beginning of the loan. The Pew study saw origination fees that range from 1 to 46 percent of the loan amount. Origination fees vary from state to state, but lenders charge the maximum allowable in each state.
When getting an installment loan, keep in mind that credit insurance and upfront fees affect the actual APR you pay, making it higher than the APR the lender quotes you.
What are title loans?
A title loan is another type of loan that doesn’t require good credit for approval. Like payday and installment loans, they also have high rates. A title loan is secured, meaning you have to put up collateral to get the funds – in this case, the title to your car.
With a title loan, the amount you qualify for depends on an assessment of your car’s value. Loans range from a few hundred dollars to $10,000. A standard title loan is due in full after 30 days. This includes the finance charge, which can be as much as $125 for a $500 loan – that means you’ll pay $625 total when the loan is due. According to the Pew Charitable Trust, the average APR on title loans is around 300%.
Title loans are very risky. Because you use your vehicle as collateral, it can be taken by the lender if you don’t make your payment or come to an alternative arrangement. Often, that means rolling over your loan. The Consumer Financial Protection Bureau studied title loans and found that over 20 percent end in a car being repossessed. Only 12 percent of borrowers pay off the loan without having to renew. More than a third of borrowers end up taking out more than seven loans, meaning they have to pay nearly as much in fees as they borrowed in the first place.
We caution you to avoid title loans. They are expensive and risky and can result in you having to constantly roll the loans over or have your car taken. The loans don’t affect your credit, but getting your car repossessed can stay on a report for up to seven years.
Does where I live affect my payday loan?
Every state regulates payday loans differently. In some states, including Georgia, they are banned outright. In other states, interest rates are capped to such an extent that they are essentially banned. In total, 18 states ban payday loans. Other states, such as Oregon, have some restrictions in place, but payday lenders still operate in them. Payday loans come with few restrictions in 32 states. Any restrictions in these states tend to focus on the maximum number of loans someone can take out and not on rates.
State laws do change though. In 2016, South Dakota passed a ballot initiative that capped interest rates on payday loans at 36% where there had previously been no restrictions. In 2018, Colorado passed a similar law, also limiting payday loans to rates of 36%.
Beware of lenders that try to skirt these laws. For example, many set up on Native American tribal land to get around state laws. We also noticed some online lenders are based outside the U.S. and offer uniformly high rates no matter where you live.
A good rule of thumb is to see if a payday lender’s website lists individual states. If there’s a flat rate no matter where you live, stay away.
What are the main payday loan requirements?
Payday loans have fewer requirements than other types of loans, with the following being the most basic:
- Meet the minimum age requirement (18 in most states)
- Have an open and valid checking account
- Provide proof of income (usually a pay stub, but other documents may be accepted)
- Have a valid phone number
If you apply online, the requirements may be slightly different. For example, you need to provide a checking account and a Social Security number. Some payday lenders will not lend to you if you’re currently filing for bankruptcy.
There’s no credit check or any minimum credit score requirement. Unlike other types of loans, the rates are flat and don’t change based on your income or other factors. The biggest factor in determining how much you pay in fees on your payday loan is the state you live in.
How quickly you receive your money depends on if you apply online or in person. If you apply at a store, you get your money right then and there. If you apply online, you have to wait between one and two business days to get your money. As such, if you need money immediately, it may be better to apply at a store.
Should you roll over your payday loan?
Payday loans are meant to give you access to money short term, until you get your next paycheck. Reasons for getting a payday loan range from unexpected expenses to working irregular hours at your job. But more often than you’d think, these loans don’t get paid off after two weeks and need to be rolled over into another loan. If you can, avoid doing this – it can result in you being stuck in a cycle of debt, and you’ll end up paying much more in fees than the amount you borrowed.
According to the CFB, more than 80 percent of payday loans are rolled over. When you roll over a loan, you pay the finance charge and have another two weeks to pay back the initial amount. For example, if you take out $200 with a $40 charge, you’d normally pay $240 at the end of a two-week period. If you can’t pay it all back, you pay the $40 and rollover the $200 while also taking on another $40 finance charge. If you pay that loan back, you end up paying a total of $280.
You can see how rolling over loans can lead to you paying much more than you initially borrowed. If you’re considering a payday loan but are worried about being able to pay it back, look into an installment loan. These tend to have smaller payments spread out over a longer time period. You can also work on improving your credit to become eligible for personal loans or credit cards, which have lower rates and monthly minimum payments.
What is the statute of limitations on payday loans
The statute of limitations is the amount of time you’re legally liable for your debt. This varies from state to state, and in some cases, it applies to payday loans differently than other types of debt. Typically, the statute of limitations begins when your payments become delinquent, not when you sign the initial contract.
Don’t take your debts having a statute of limitations as an invitation to default. It's just a time limit on how long a lender or collection agency has to collect your debt. This can range from six to 10 years. If you do default, the lender can still attempt to collect or sell to a collection agency.
One drawback to payday loans is you give the lender access to your bank account. If you do default, the lender will make automatic withdrawals from your bank, which can lead to overdraft fees and affect your credit.
If you do become delinquent on your payday loan and it does go to collection, it's important to know your rights. Despite any threats, you cannot go to jail for unpaid debt, but the lender or collection agency can sue you. Just because your debt has an ostensible expiration date doesn’t mean you can wait it out. If you’re having trouble meet your payments, contact the lender to see if you can work out a payment plan or alternative arrangement.
What are the best alternatives to payday loans?
You often hear that payday loans are something people turn to when there’s an emergency expense like a car accident or medical emergency. That’s not necessarily true. In a study on payday loans, the Pew Charitable Trust found that 69 percent are used to pay for recurring expenses like utilities, food or other bills. The average borrower uses eight loans a year, which last about 18 days each.
If you find yourself in a situation where you're considering a payday loan, explore alternatives first. If you have emergency expenses, consider using a credit card or finding a cosigner for a personal loan. These have lower interest rates and don’t put you in as much of a bind as payday loans. The balloon payment when the term of your payday loan expires can leave you short when your next paycheck arrives, which can force you into taking out another to pay for your expenses. In cases like this, making minimum payments on a credit card, while not ideal, is a better option than being caught in a payday loan debt trap.
Look for a credit union – a non-profit alternative to a bank. Many have begun to offer payday alternative loans, which are like payday loans in that they are for smaller dollar amounts, but they don’t have high fees.
We spoke to John Fairbanks at the National Credit Union Administration who told us that “Many credit unions have their own programs to provide small-dollar, short-term loans, either in lieu of payday loans or as a means of helping members get rid of existing payday loans so they can begin to rehabilitate their credit.”
Payday alternative loans are available through federal credit unions and have applications fees that are capped at $20 for the entire amount of the loan. State credit unions also offer similar short-term, small-dollar loans.
Payday loans: Summary
In short, explore all the options available to you - borrowing from relatives, credit cards, a loan from a credit union, etc - before considering a payday loan.
If you do find yourself having to use these lenders, take out as small as loan as possible for as short a time as possible, and be as sure as you can be that your finances will be strong enough to make the repayments in the coming two weeks or a month.