Pay Day Loans, Cash Advances and Short Term Credit

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PayDay Loans, Cash Advances, Cash for Title and Short Term Credit

The Minimum Requirements to get a Short Term Cash Loan
(Pay Day Loan)

Payday loans or cash advances against your paycheck are a very expensive way to finance your spending habits. The rules to get a payday loan differ from lender to lender, but some of the minimum requirements are:

You have to own an active checking or savings account and it has to be at least three (3) months old.
No starter checks (the checks which do not have your name and details on it, which the bank issues when you just open an account)
You have to have held your current job for at least three (3) months.
Your Net after-tax and deductions pay has to be at least $1000 per month (about $220 per week) or $600 per month if you receive government funds.
Direct deposit of your wages have to be done for at least three (3) months into the same account.
You must be able to receive calls at work.
You must have access to a fax machine ( not all lenders require that, but fax facilities are easily available for instance at Kinko's) Some services do no longer require fax access.
You must not be a temporary employee.

Bad Credit Loans

Ways to avoid having to take out a Pay Day Loan

These types of loans are not right for all situations. Before getting such a loan, you should look into all of your options. Here are some alternatives to consider, before getting a payday loan:

Call the company that sent you a bill and request an extension or work out a payment plan
Cut other expenses such as dining out or other entertainment
Borrow money from your employer, a friend, or family member
Check into emergency assistance programs in your church or community
Get an advance from your credit card or bank (make sure you fully understand all of the fees that may apply)

These options may be less costly options than a payday loan. However, if these options aren't available, then make sure you find the lowest cost payday loan possible. Don't get fooled by low "teaser" and "introductory rates" that double or triple a few days after you have taken out the loan.

The Costs of Pay Day Loans (USA)

"Pay Day Loan offices" outfits, lend you money until the next Pay-Day. The costs for a US$ 500.00 payday loan for 15 days varies by state of residence but can be up to $150.00 (starting usually at $17.50 per $100 you borrow for 10 days). In other words simple interest is equivalent to an APR between 450% and 730% per annum or more, depending on the state. If you want to get the loan the same day you apply, you will pay, in most instances, $10 for that privilege.

It might be a lot cheaper to borrow from your grandmother or the uncle you hate so much! Even if you have to grovel or clean their bathroom for 30 days! However, if you need the money you have to have it!

Read all the fine print in the conditions carefully so that you know exactly what your obligations are! Because, they will come after you, if you default on any obligations

On-Line Pay Day Loan Companies

The market for short term pay-day loans is regulated by the individual States. Some States do not allow these types of loans and some operators (they have to be licensed by each state) do not provide their service in some states. It is therefore important that you check, whether the company you want to obtain a loan from, operates in your state of residence. You should also be aware that the maximum amount for pay-day-loans varies from state to state!

For a first time borrower, you can get up to $700.00 in a loan (depending on the information you give and your State of residence). To be considered for a loan you have to
  • Have an active checking account
  • Have been employed for at least one month
  • Must be a US citizen or permanent resident
  • Must be at least 18 years of age

The loan agreement will be governed by the applicable laws of your state of residence. Questions or complaints should be directed to your state's regulatory agency.


* requires you to have the following, at a minimum, for your application to be accepted:
  • You have been employed three months or longer.
  • Take home a minimum of $1,000 monthly (after taxes).
  • Valid checking account in your name.
  • Current (and valid) home and work telephone numbers.
  • U.S. Citizen and be over 18

The APR (annual percentage rate) and fees for a payday loan vary by state and can be viewed here

Pay Day Loan and Short Term Credit in Europe
(not available to US Residents)

Legal Pay-Day-Loans, the way they are known in the USA, exists in Europe only in the UK and Ireland. The interest rates in the UK and Ireland are even higher than in the USA and an APR of over 1,700 % is not unusual. Obviously, there exists an underground market of unscrupulous loan sharks, in the same way they exist here in the USA. But, the legal side of that short term loan market is far better regulated than here in the USA.

In the rest of Western Europe, "Small Credit Banks" charging fairly normal interest rates (Annual Percentage Rates- APR's) of between 5 and 10% are more common. By American standards, they offer normal banking terms without the excessive "late payment" and similar fees.. An example from Germany is shown below. Most West European Countries have strict usury laws that prohibit charging excessive interest rates. Other factors, such as your place of residence being registered at an inhabitants control office, and you are therefore easy to locate, make "skipping a loan" almost impossible. Hence the default rate is much lower than here in the USA.

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