It’s easy to feel tempted by the speed and convenience of online payday loans when you need quick cash. Payday loans don’t require credit checks or a long approval process, so they can get you the money you need fast. Unfortunately, the truth is that these loans can be expensive and difficult to pay back. You may not even realize the full cost of a payday loan until the money comes out of your account.
Luckily, there are a number of safe, fast and easy online payday loan alternatives that you can use to get money for an unexpected bill or fee. Today, we’re going to show you the true cost of payday loans and how you can find a safe online payday loan alternative. Finally, we’ll show you how you can get up to $250 instantly with a 0% APR Instacash advance from MoneyLion.
Overview: What is an Online Payday Loan
A payday loan is a very short-term loan that carries a high interest rate. The name comes from the idea that you’re supposed to pay the loan back on your next payday, when your check arrives. There is no single definition of a payday loan, but the Consumer Financial Protection Bureau (CPFB) says that most payday loans share a few common characteristics:
Very short term (usually two weeks or less)
A loan for a small amount (usually $500 or less)
Comes from a lender who doesn’t care whether you have the ability to pay the loan back
Comes from a lender who charges a high annual percentage rate (APR)
Includes very high flat-rate fees for vague service such as “administrative fees,” “service charges,” etc.
The lender expects the loan in a single lump-sum payment instead of installments
You can roll over the loan for another term if you can’t pay on time
You can get a payday loan from a physical payday lender or through an online payday lending service. As the name suggests, an online payday loan is a payday loan serviced through the internet. You usually cannot get a payday loan through a bank or credit union.
Most financial experts recommend that you steer clear of payday loans even if you need quick cash. Payday loans charge high fees and incur some of the highest interest rates on the market, which can make it hard to pay the loan back on time. It can be tough to break out of the payday loan dependency cycle once you’re trapped in it. MoneyLion can help.
How Do Online Payday Loans Work?
Here’s how payday loans operate.
After you apply online using the lender’s system, a representative from the lending company contacts you with the terms of your loan. A contract will detail the amount you borrow, the APR (interest rate), any fees due when you pay off the loan and the loan due date.
The lender will also request electronic access to your checking account. You’ll have to authorize a hold on your bank account to get an online payday loan and the lender will automatically withdraw the money from your account in case you don’t pay back what you owe.
Once you sign off on the terms of your loan and allow the lender access to your bank account, the lender will deposit money into your account. The funds would be available to you automatically or within one business day (depending on your lender) and you’d be able to use the funds from a payday loan for almost anything you need.
The lender would next take the principal, any fees and any interest that accumulated on the loan out of your bank account on its due date. You can also pay back what you owe if the payday lender has a physical store. The lender will release access to your bank account as soon as the loan is paid off.
You might have the option to roll your loan over or only pay down the fees and interest. The lender would hang onto the loan for another term, usually around two weeks. The loan would collect fees and interest again, which would be then due on the next due date.
The legality of rollovers varies by state. Some states allow you to roll your loan over an unlimited number of times, while others only allow you to roll the loan over once. Rollovers are illegal altogether in some states. Contact your lender to learn more about your specific state’s laws.
Why do payday loans have such a bad reputation? Most experts will tell you not to take a payday loan because they have very high interest rates. Payday loans often have interest rates between 300% to 780% APR, which means that they accumulate interest much faster than any other type of loan. Compare this to just 0% APR when you use Instacash cash advances from MoneyLion.
It’s not hard to see why so many people end up rolling over their payday loans. Eighty percent of all payday loan borrowers roll their loan over at least once and over 50% of online payday loan borrowers default on what they owe.
Let’s look at just how quickly a payday loan can accumulate interest. Say that you want to borrow $500 with an online payday lender. The lender agrees to give you a loan with a term of two weeks and an interest rate of 500%. There’s also a flat-rate service fee of $50 due when you pay back the loan. You’ll owe your lender a grand total of about $646 — that’s $500 in principal, $50 in fees and $96 in interest.
Payday loans are one of the most expensive ways to borrow money. Unfortunately, many people who struggle to pay their bills believe that they have no other choice to get money quickly. It’s important to find alternatives to these predatory loans, like 0% APR Instacash cash advances from MoneyLion.
What to Look for in an Online Payday Loan Alternative
An online payday loan isn’t your only option. Here are a few things to look for when you consider payday loan alternatives.
Quick Signups And Deposits
Chances are that you don’t have time to run to the bank or wait for loan approval if you’re considering an online payday loan. Look for a payday loan alternative that allows you to apply online or in an app and see your money deposited into your account quickly. Some banks even offer instant deposit programs like MoneyLion’s Instacash.
Low APR
One of the reasons why payday loans are so hard to pay back is because they accumulate interest very quickly. Look for a lender that offers loans with a low APR and do the math to see how much you’ll end up paying for your loan. If possible, choose a lender like MoneyLion that offers 0% APR credit — these don’t accumulate any interest.
Low Fees
Just like a high APR can make a loan difficult to pay back, high fees can also impact how much you pay to borrow money. Look for a lender who offers low or no fees like MoneyLion.
No Impact On Your Credit
One of the reasons why payday loans are so popular is because they don’t usually come with credit requirements. You might assume that you can’t get a loan from a bank or credit union if you have a low credit score or no credit. However, there are a few payday loan alternatives that allow you to get money without a credit check. MoneyLion doesn’t require a credit check for access to Instacash cash advances at 0% APR.
Ask your lender about any “hard checks” they do before issuing you a loan. A hard check gives the lender access to your credit report and allows them to see your score. These checks also lower your credit score, which can be frustrating if you’re working on raising your score. Choose a lender with no credit requirements to preserve your score.
Meet the Online Payday Loan Alternative: Instacash from MoneyLion
Instacash is the safe and affordable alternative to a payday loan. Simply download the app, apply for Instacash cash advances with no credit check, and access cash whenever you need it. Instacash allows you to access your next paycheck early — with 0% APR.
Even better, you can get the cash instantly deposited into your account to use on whatever you need. Instacash is the simple and fast way to avoid payday loans and pay off your bills or do something fun. And unlike with Dave cash advances up to just $75, you can get up to $250 in MoneyLion Instacash cash advances.
How to Get Safe, Online Credit with Instacash from MoneyLion
Ready to get started with Instacash? It’s easy to open an account with MoneyLion — here’s how to get started.
Open An Account With MoneyLion
Download the MoneyLion app from the Google Play or Apple App store. Open up the app and follow the instructions to open a free account. You’ll need to enter some of your personal information to finalize your account. You’ll also need to upload a copy of a valid photo ID like a driver’s license or passport to open your account.
Qualify for Intacash
Just link your checking account to see if you qualify for Instacash at 0% APR in just minutes. There’s no credit check.
Use Instacash
Now that you’ve qualified, you can use Instacash. Open the app and click on the tab labeled “Finances.” From there, click on the button labeled “Instacash.”
From here, you can choose the amount of money you need. Depending on how much you have coming into your account each period, you can get up to $250 in Instacash. Choose the amount of money you need and confirm your transaction. You’ll see money in your checking account right away.
You can use Instacash however you want. Pay off a bill, cover a fine or even treat yourself or a loved one to a nice dinner. You’ll pay back what you owe on your next payday with no interest.
Protecting Yourself And Your Money
Payday loans may seem like a good idea when you’re struggling financially. Unfortunately, the truth is that these loans can be much more costly than you think. Before you take a payday loan, make sure you research all other alternatives — including no-interest Instacash from MoneyLion.
Are you ready to get started with Instacash? Download the MoneyLion app from the Google Play or Apple App store today to learn more and create your account!
How quickly can I get funds into my account?
With a MoneyLion Plus or Instacash account, you can have access to funds immediately after signing up for your account.
How much will I pay back if I borrow?
Instacash is a cash advance with $0 monthly fees or interest. You can use Instacash as often as you need with your membership. You can borrow up to $250 by added direct deposit from your employer.
Is Instacash a safe app?
Instacash is a feature in the MoneyLion app, which is encrypted with the same protection offered by all other major financial institutions.
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Disclosures
Instacash® is an optional service offered by MoneyLion. Your available Instacash Advance limit will be displayed to you in the MoneyLion mobile app and may change from time to time. Your limit will be based on your direct deposits, account transaction history, and other factors, as determined by MoneyLion. Expedited delivery requires Turbo Fee. See Instacash Terms and Conditions for more information and eligibility requirements.
Credit Builder Plus membership ($19.99/mo) unlocks eligibility for Credit Builder Plus loans and other exclusive services. This optional offer is not a Pathward product or service. A soft credit pull will be conducted which has no impact to your credit score. Credit Builder Plus loans have an annual percentage rate (APR) ranging from 5.99% APR to 29.99% APR, are made by either exempt or state-licensed subsidiaries of MoneyLion Inc., and require a loan payment in addition to the membership payment. The Credit Builder Plus loan may, at lender’s discretion, require a portion of the loan proceeds to be deposited into a reserve account maintained by ML Wealth LLC and held by Drivewealth LLC, member SIPC and FINRA. The funds in this account will be placed into money market and/or cash sweep vehicles, and may generate interest at prevailing market rates. You will not be able to access the portion of your loan proceeds held in the credit reserve account until you have paid off your loan. If you default on your loan, your credit reserve account may be liquidated by the lender to partially or fully satisfy your outstanding indebtedness. May not be available in all states. Credit Reserve Accounts Are Not FDIC Insured • No Bank Guarantee • Investments May Lose Value. For important information and disclaimers relating to the MoneyLion Credit Reserve Account, see Investment Account FAQs and FORM ADV.
MoneyLion does not provide, nor does it guarantee, any third-party product, service, information, or recommendation. The third parties providing these products or services are solely responsible for them, as well as all other content on their websites. MoneyLion is not liable for any third party's failure with regard to those advertised products, services, and benefits. These advertised products and services may not be FDIC insured or bank-guaranteed, and may be subject to a different privacy policy than MoneyLion’s. You should check individual offers, products, and services to become familiar with any applicable restrictions or conditions that may apply. MoneyLion may receive compensation from third parties for referring you to the third party, their products or to their website.
Instacash is a 0% APR cash advance service provided by MoneyLion. Your available Instacash advance limit will be displayed to you in the MoneyLion mobile app and may change from time to time. Your limit will be based on your direct deposits, account transaction history, and other factors as determined by MoneyLion. This service has no mandatory fees. You may leave an optional tip and pay an optional Turbo Fee for expedited funds delivery. For a $40 Instacash advance with a Turbo Fee of $4.99, your repayment amount will be $44.99. Generally, your scheduled repayment date will be your next direct deposit date. An Instacash advance is a non-recourse product; you will not be eligible to request a new advance until your outstanding balance is paid. See Membership Agreement and help.moneylion.com for additional terms, conditions and eligibility requirements.