A payday loan or a cash advance loan is a loan for a short time. You pay a fee to borrow the money, even if it is for a week or two.
A payday loan or cash advance loan can be very expensive. Before you get one of these loans, consider other ways to borrow.
You might be able to borrow money from:
You might ask for more time to pay your bills. You can talk to a credit counselor to get help.
If you are in the military, the law protects you and your dependents. The law limits the interest rate on payday loans. The law also tells lenders to give you information about your rights and the cost of the loan. The military also offers financial help and help managing your money.
Read What to do – Service Members to learn more.Read more
A payday loan or cash advance loan can cost a lot. Even if you only borrow money for a week or two until you get your paycheck.
Most loans have an annual percentage rate. The annual percentage rate is also called APR. The APR is how much it costs you to borrow money for one year. The APR on payday loans and cash advances is very high.
When you get a payday loan or cash advance loan, the lender must tell you the APR and the cost of the loan in dollars.
The annual percentage rate, or APR, is based on:
If you cannot pay the lender the money you owe, you borrow the money for two more weeks. This is called a “rollover,” or “rolling over” the loan. To roll over the loan, you pay another fee. If you roll over the loan a few times, you will pay a lot to borrow the money. It becomes harder to get back to where you started.
Payday loans or cash advance loans are loans made for a short time, often two weeks. These loans can be very expensive.
Before you get one of these loans, consider other ways to borrow money:
Compare the costs, if you have more than one choice. For each choice, find out:
Write the answers to these questions. Decide which choice is best for you.
If you are in the military, the law protects you and your dependents. The APR on payday loans cannot be more than 36%. The lender must give you documents that explain the cost of the loan and your rights.
Even with these protections for service members, payday loans can be very expensive. Before you get a payday loan, consider these choices:
For more information about other ways to borrow money or to get help managing your finances: