Pros / In some states, rates are very low.
Cons / As an online-only lender, it takes one to two business days to receive your money.
Verdict / Of the online-only lenders we looked at, CashNetUSA serves the most states and has the best rates.
Getting a payday loan online can be more convenient than going to a store. You don’t have to wait in line or hunt for a location, and you can sign up from the comfort of your own home. Online lenders charge the same fees as traditional payday lenders with physical locations. After comparing it to other options, we found CashNetUSA to be the best online payday loan lender.
To apply for a loan through CashNetUSA, you need your ID, your Social Security number, proof of income and an active checking account. In many cases, you can use direct deposit records as proof of income, though in some states you may have to supply additional information. CashNetUSA’s application requirements don’t differ significantly from those of any other lender we reviewed.
One of the biggest disadvantages to applying online for a payday loan is you don’t get your money immediately. You usually receive your funds on the next business day, though if you apply on a weekend, you have to wait until the following Monday for the money to be deposited into your bank. If you have a pressing need for immediate cash, getting a loan from a storefront payday lender, such as Check Into Cash, may be a better option.
Each state regulates payday loans differently, so rates for online payday loans are the same as those you apply for at physical locations in your area. Some states restrict the maximum amount payday lenders can charge for their services. In those states, California being one example, CashNetUSA charges the maximum it can – in California, this is $17 per $100 you borrow.
In states where regulations are laxer, we expected to see more expensive fees. The highest we found CashNetUSA charge was $25 per $100 borrowed, which is about average for the high end. The lowest we saw this lender charge was $9 per $100 borrowed, which is one of the lower fees overall. Depending on where you live, your rate will vary, but these numbers represent a range between which most prices will fall.
In some states, you may be able to apply for installment loans, which are available in larger amounts and can be repaid over a longer period. Typically, a payday loan is repaid after two weeks, but an installment loan is repaid over several months, sometimes even as long as a year. The drawback is installment loans have the same high rates as payday loans. And because they accrue interest over a longer period, you pay significantly more.
Another option CashNetUSA offers in some states is a line of credit. This functions like a credit card, where you only use some of the available money when you need it. You only pay back what you use. One advantage of a line of credit is you can make minimum payments. Payday loans require complete repayment at the end of the term, and installment loans have expensive payments due in full bi-weekly. Keep in mind that a line of credit accrues interest daily, and the rates are much higher than those on credit cards, so only making minimum payments can cause significant problems down the line. Still, if managed wisely, a line of credit can be a useful option if you’re in financial distress.