If you’re thinking about a payday loan, make sure you understand your rights and responsibilities, and the agreement you’ll enter with your lender. The most important thing to know up front: “guaranteed approval” loans do not exist. No lender or company can guarantee your approval.
What payday loans are
A payday loan, or fast cash advance, is not a long-term loan. The interest rate on long-term loans and payday loans differ significantly. To make the most of a short-term bad-credit loan, make sure you can repay within the agreed period. Extending the term is strongly discouraged — it adds to your financial burden.
Familiarize yourself with the laws in your state. Some states cap the maximum amount you can borrow — commonly $1,000, sometimes as low as $300 — and limit interest rates and fees.
Not for regular usage
Taking payday loans on a regular basis can harm your finances. Interest rates and fees are higher than those offered by banks, so use them for real emergencies only.
Bad credit is not a problem
Past difficulties don’t make borrowing impossible. Payday loans can be very useful — just do your homework first, avoid lenders that make unrealistic promises, and make sure you can repay.
Anyone claiming 100% guaranteed approval, or requiring an upfront fee before you receive funds, is almost always a scam. Walk away.