What do I need for a payday loan?

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A few common things you need to take out a payday loan include proof of income, valid ID, an active checking account, and to be at least 18 years old. There is usually no credit check with a payday loan, because lenders focus more on the borrower’s ability to repay the loan, but some payday lenders may ask for one. 

These requirements may vary depending on where you live, the payday lenders you inquire with, and the laws surrounding payday lenders in your area. One thing to keep in mind is that due to the Military Lending Act, payday loans (any loan over 36% APR) are not permitted to active military members and their dependents.

Payday loans are a common financial product that you’ve most likely heard of if you’ve ever needed to borrow money through quick cash. Payday loans are popular, and the payday loan market is expected to continue growing. According to Globe News Wire, the payday loans market was estimated to be worth roughly USD 33.5 Billion in 2021 and is expected to reach USD 42.6 Billion by 2028.¹ 

Payday loans are considered “unsecured” loans because they don’t require any collateral to get one. These are meant for borrowers who have a difficult time making their money stretch to their next payday. 

Payday loans are usually repaid within two weeks or on the borrower’s next paycheck is due, usually straight from the borrower’s bank account, hence the name. But because payday loans generally have high interest rates, they can be difficult to repay on time. And if you don’t repay on time, the payday lender may extend your loan and charge you additional fees or interest. This is called “rollover.” Most payday lenders have rollovers for these short term loan options. Payday loan amounts usually are for a few hundred dollars.

Be careful when considering any short-term financial product like payday loans, title loans, or pawn shop loans. These loans may provide you with the cash you need at the moment, but payday loans could carry unfavorable terms and conditions that could lead to more debt in the future. And if you don’t use a trustworthy and credible lender, you could end up in a cycle of debt. 

Luckily, there are now several alternatives to payday loans and title loans. One is called a “personal installment loan.” These loans are usually repaid over a longer period of time than payday loans, sometimes up to a couple of years. They also allow borrowers to get more money (up to several thousand dollars with loan amounts in some cases). You can find personal loan options with a credit union, bank, or online lender.

At CreditNinja, we think the most important thing to remember, regardless of which loan you choose to take, is that making your payments on time and in full will keep you from ending up in a debt cycle. 

Always be sure you’re capable of repaying the payday loan before signing for it. Do your homework, research the lender and the loan terms, and make a budget. And ask questions if there’s something you don’t understand. These tips can help you avoid predatory lenders, and find the right loan for your situation. For tips on finding the right loan and repayment, check out CreditNinja’s online resources.


  1. 2022 Statistics: Payday Loans Market Will Surpass USD 42.6 Billion at 4.1% CAGR Growth: Vantage Market Research
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