HomeWhat is a short-term loan?
A short-term loan is repaid over a relatively short period. Payday loans commonly fall due around a payday. Costs and repayment structures vary; read the written agreement.
Common Questions
What should I check before borrowing?
Check the lender’s identity, applicable licensing requirements, APR, fees, payment dates and total repayment amount. Compare the payment with the money available after essential expenses.
Is collateral required?
Check the agreement for any security requirement and payment authorization. A bank debit authorization describes how payments may be collected; read it before signing.
Does bad credit guarantee a decision?
No credit history guarantees approval. Eligibility and the lending decision depend on the lender’s assessment and applicable requirements.
Will my credit be checked?
Ask the lender which credit or other consumer reports it uses and how it verifies information. Do not assume that every lender follows the same process.
How much should I borrow?
Base the amount on what you can repay while covering essential expenses. An offered amount is not a recommendation to borrow the maximum.
How are funds delivered?
Check the delivery method in the written offer. Confirm any account details and payment authorizations before accepting the agreement.
When will funds arrive?
Ask the lender about its funding schedule and ask your bank about availability. Do not rely on an assumed same-day or next-day payment.
What alternatives can I consider?
Consider a payment arrangement with the biller, help from a local assistance program, or a lower-cost credit option. Compare the full cost and repayment schedule.
What happens if I pay only a renewal fee?
A renewal or rollover fee can extend the due date without reducing the principal. Ask for the remaining balance and new total cost in writing; rules vary by state.
When is repayment due?
Use the dates and amounts in the written agreement. If you expect difficulty paying, contact the lender promptly to ask about available repayment arrangements.
Where can I learn about borrowing costs and rights?
The Consumer Financial Protection Bureau provides information about payday loan costs, repayment, licensing and consumer rights. Our Borrower Resources page links to these original sources.
General borrowing information: CFPB payday loan guide. Read the linked explanations on Borrower Resources.