A $1,300 payday loan is an unsecured personal loan that can be approved with bad credit. Unlike traditional personal loans, payday loans have a short loan term, due on your next paycheck. These loans come with high origination fees and interest rates so they are more expensive than installment loans with equal monthly payments. If you have poor credit or no credit history, some lenders offer payday loans no credit check but that means higher personal loan rates. The loan is disbursed fast so it’s good for emergency expenses like car repair.

Features

1. Fast Loans. Payday loans are known for fast access to funds, within a few business days.

2. Unsecured Personal Loan. Payday loans are unsecured, you don’t need to collateral to borrow.

3. Short Loan Term. Payday loans have short loan term, due on your next paycheck, which is a few weeks.

4. High Interest Rate. Payday loans have high interest rate and origination fees, more interest paid over the short loan term.

Pros and Cons

Pros

1. Fast Access to Funds. A $1,300 loan from a payday lender can get you fast access to funds, within a day.

2. Low Credit Score Requirements. Payday loans have less credit score requirements than most personal loans so it’s an option for bad credit or no credit history.

3. Easy Application. Most lenders offer online application, so you can apply for a small personal loan from the comfort of your own home.

Cons

1. High Origination Fee and Interest Rate. Payday loans have high origination fee and interest rate, more interest paid over the loan term than other loan types.

2. Short Loan Term. Payday loans have short loan term, due on your next paycheck, which can be tough for some borrowers to pay loan on time.

3. Debt Trap. The combination of high interest rate and short loan term can lead to debt cycle, where borrowers need to take out another loan to pay off previous loan, more interest and fees.

How to Apply for a $1,300 Payday Loan?

1. Choose A Payday Lender. Select a reputable payday lender, online or physical location, that comply with state laws and federal regulations.

2. Prepare Required Documents. Gather required documents: pay stub, social security number, bank account information and proof of income.

3. Complete The Application. Fill up the payday loan application form with personal details, employment information and loan amount. Submit online or in person.

4. Review The Payday Loan Agreement. Review the payday loan agreement carefully, interest rate, fees, repayment terms and due date.

5. Get Loan Proceeds. Once approved, get the loan proceeds directly to your bank account or prepaid card account, within the same business day.

Requirements

According to the U.S. government’s Consumer Financial Protection Bureau (CFPB), to qualify for a loan, most payday lenders only require that borrowers:

1. Age. Applicants must be at least the age of majority, which is 18 in most states, some states require 19 or 21 years old.

2. Active Checking Account. A valid and active bank account for the deposit of loan proceeds and for the online lender to withdraw repayment.

3. Proof Of Income. Borrowers need to show proof of income, such as pay stubs, to prove they can repay the loan.

4. Valid ID. Borrowers must present valid ID, which is social security number to verify their identity.

How to Get the Money

1. Direct Deposit. Most common is direct deposit into your bank account. Once your payday loan application is approved, the payday lender will deposit the loan proceeds into your active checking account, within the same business day.

2. Prepaid Debit Card. Some payday lenders offer to load the borrowed amount into a prepaid card account. Convenient for those who don’t want to use their bank account.

3. Cash. In some cases, especially with in-person payday lenders, you can get the borrowed amount in cash. But this is less common than direct deposit or prepaid card.

4. Check. A few payday lenders may give you a check for the loan amount, you can cash it or deposit it into your bank account.

Payday Loan Rates

Payday loan rates typically involve fees ranging from $10 to $30 per $100 borrowed depending on state laws and borrowing limits. A typical fee is $15 per $100 borrowed which translates to an annual percentage rate (APR) of 400% for a 2 week loan. For example, if you borrow $300, you will need to pay back around $345 by next payday. These rates are way higher than other types of loans such as personal loans or secured personal loans.

Payday lending is allowed in 37 states, 11 states including Connecticut, Maryland and New York have strict regulations or interest rate caps that limit or prohibit payday lending. Some states like Arkansas and North Carolina have repealed their payday lending laws and others like the District of Columbia have banned it altogether.

18 states and the District of Columbia have usury rate caps, often at 36% APR, to curb high-cost payday lending. States like Nebraska, Hawaii, Illinois and New Mexico have recently implemented such caps, part of the growing trend to regulate payday loan rates.

The highest payday loan rates are in states like Texas (662%), Missouri (652%) and Delaware (639%). On the other hand, states like Oregon (140%), Maine (228%) and Iowa (247%) have lower rates. Some states like Washington and Virginia have additional regulations to limit the number of payday loans or extend repayment terms to prevent debt traps.

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