Payday loan questions, answered plainly.
Common questions about payday loans, answered with facts from official sources. No sales pitch, no affiliate links, no lending recommendations.
What is a payday loan?
A short-term loan (typically $100–$1,000) due on your next payday, usually in 14 days. The lender charges a flat fee (typically $15 per $100) and requires access to your bank account or a post-dated check for repayment.
What is the typical APR?
300%–700%+ depending on your state. A $15 fee per $100 for 14 days equals approximately 391% APR. Learn more about APR →
What is a rollover?
If you cannot repay in full on the due date, you pay the fee again to extend the loan for another term. The principal stays the same. This is how borrowers end up paying more in fees than they originally borrowed. Learn about the debt cycle →
What is a lead generator?
A website that looks like a loan application but is not a lender. It collects your personal information and sells it to multiple lenders and marketing companies. Learn more →
Can I be arrested for not paying?
No. You cannot be arrested for failure to pay a civil debt. If anyone threatens arrest, they are violating the law. Learn about your rights →
Are payday loans legal in my state?
It depends. Approximately 18 states ban or effectively prohibit payday lending. Others allow it with varying fee caps. Check state laws →
What are alternatives?
Credit union PALs (max 28% APR), employer paycheck advances, community assistance programs, creditor negotiation, and cash-flow planning with Balance On Hand. See all alternatives →
How can Balance On Hand help?
Balance On Hand projects your cash flow so you can see whether you actually need a loan, or whether it is a timing problem you can solve by rearranging payments. Free. No bank login. No credit check.
If you choose...
If you read this FAQ before borrowing:
- You understand the full cost, timeline, and repayment requirements
- You know your rights (ACH revocation, extended payment plans, FDCPA protections)
- You can identify alternatives that may be cheaper or free
- You avoid common mistakes that lead to the debt cycle
If you borrow without understanding the basics:
- You may be surprised by the repayment amount or automatic bank withdrawals
- You may not know you can request an extended payment plan before the due date
- You risk entering a rollover cycle without recognizing the warning signs
- You may give personal information to a lead generator thinking it is a lender
Here's what you can do today
- Read through the most relevant topic page for your situation (linked throughout this FAQ).
- Use Balance On Hand to project your cash flow before deciding to borrow.
- If you decide to borrow, complete the Before You Borrow checklist first.
- Verify the lender is licensed in your state and is a direct lender (not a lead generator).
- If you are already in a cycle, visit the Debt Cycle page for exit strategies.
Understand the full picture before making any borrowing decision.
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