When you take out a payday loan, you are agreeing to pay back the loan in full plus the finance charge before its due date, which is usually within 14 days or before your next paycheck. If you fail to do so, you may face bank overdraft fees, collection calls, damage to your credit score, a day in court, and a garnishment of your paycheck. Payday loans are typically made at payday loan stores or at stores that sell other financial services, such as check cashing, title loans, rent-to-own, and pawns. It is important to note that some payday lenders may offer longer-term payday installment loans and request authorization to electronically withdraw multiple payments from the borrower's bank account.
When you take out a payday loan, you may receive cash or a check, or have the money deposited into your bank account. You may be tempted to use a payday loan as a solution to handle an emergency bill or pay off another debt, but it is important to remember that a payday loan will end up costing you more than the problem you are trying to solve. Additionally, if the payday lender charges a higher rate than what Washington law allows, the payday loan cannot be enforced. When you take out a payday loan, you are giving the lender permission to withdraw money from your account by writing a check or authorizing them to withdraw money directly from the account.
It is important to note that this permission applies regardless of the type of funds in the account.