How are payday loans repaid?

Once a payday loan is approved, you may receive cash or a check, or have the money deposited into your bank account. You will then need to repay the loan in full plus the finance charge before its due date, which is usually within 14 days or before your next paycheck.

How are payday loans repaid?

Once a payday loan is approved, you may receive cash or a check, or have the money deposited into your bank account. You will then need to repay the loan in full plus the finance charge before its due date, which is usually within 14 days or before your next paycheck. Default on a payday loan can result in bank overdraft fees, collection calls, damage to your credit score, a day in court, and a garnishment of your paycheck. Any payday lender that causes you to pay an additional fee to “renew your payday loan” and make the entire loan mature later is violating state law.

Payday loans are made at payday loan stores or at stores that sell other financial services, such as check cashing, title loans, rent-to-own, and pawns, depending on state licensing requirements. You may think that a payday loan is the only solution to handling an emergency bill, or even to pay off another debt, but the truth is that a payday loan will end up costing you more than the problem you are trying to solve. Some payday lenders also offer longer-term payday installment loans and request authorization to electronically withdraw multiple payments from the borrower's bank account, which are usually due on each payment date. If the payday lender charges a higher rate than what Washington law allows, the payday loan cannot be enforced.

By writing a check to your account or authorizing the payday lender to withdraw money directly from the account, you give the payday lender permission to withdraw money from your account, regardless of the type of funds in the account.