Biggest Payday Loan Myths

A lot of misinformation exists about advanced payday loans, especially online. Read our list of the biggest payday myths to help discern fact from fallacy.

1. I can repay my advanced payday loan whenever. Some payday lenders do offer a degree of flexibility in their repayment options, but this does not give you carte blanche to take as long as you like. With most lenders, borrowers must at least pay the interest charges of the loan on the due date in order to protract the repayment time. Even then, lenders usually only give the borrower an additional two weeks or so to come up with the money. Remember, not all lenders have flexible repayment plans, so check with your lender before you make any decisions.
2. I will get my loan as soon as I submit my application. As with all loans, an advanced payday loan takes time to process. The application and processing time is typically shorter than that of most other loans, but that doesn't mean that it's instantaneous. Your lender will still have to investigate the information on your application and arrange to have the funds wired to your account. The earliest you can expect your loan is usually the next business day after you apply (varies by lender).
3. When cash flow problems arise, payday loans should be the first place you turn. If anything, an advanced payday loan should be the last option you look to when experiencing cash flow issues. These loans are very costly sources of cash, and you would do well to consider every alternative before turning to payday borrowing. Don't overlook possibilities such as borrowing from a family member or friend or requesting an advance from your employer.
4. All payday lenders have the same requirements and policies. Every advanced payday loan company will have vastly different qualification requirements, procedures, and policies. You can't assume that because two companies offer the same product that they operate in the same way. Ideally, you should find out the company's policies before you sign your loan documents. Don't be afraid to ask your lender questions about how they handle the borrowing process.
5. As long as I have a job, I can qualify for the maximum loan amount that my lender offers. Though you may get approved for an advanced payday loan, that does not mean that you will automatically qualify for the maximum loan available. The amount of the loan you qualify for will depend heavily on your income. With most lenders, the more you make, the more you can borrow (varies by lender). Typically, lenders will let you know the amount you qualify for once they inform you of your approval status.
6. The information in my loan agreement is irrelevant. You may be tempted to scan through the information in your loan documents quickly and haphazardly, but doing so will come back to haunt you later. Your advanced payday loan documents contain critical information about your interest rates, due dates, and rights as a borrower. Always read through the documents thoroughly and discuss any concerns with your lender. For more tips, read through the borrowing advice we have provided.