Payday Loan Statistics

You can avoid paying payday loans legally by giving your bank a stop-payment order before the payment is due. You can also contact the payday loan provider and your bank or credit union to revoke authorization for automatic withdrawals from your bank account.  

Keep in mind that revoking authorization from the payday lender does not cancel your debt, and the lender could pursue legal action or sell your debt to a debt collector if you stop making payments. Debt collectors report unpaid debt to the major credit bureaus, which could damage your credit score.

How to Avoid Paying Payday Loans Legally

1. Notify the payday lender: You can send a letter to the payday company to notify them that you're revoking their authorization to automatically withdraw money from your bank or credit union account.
2. Notify your bank or credit union: It's important to let your bank or credit union know that you've revoked authorization from the payday lender because some lenders may continue to withdraw funds from your account.
3. Issue a stop-payment order: Even without revoking authorization, you can still stop an automatic payment from being withdrawn from your account. You can do this by giving your bank or credit union a stop-payment order. A stop-payment order must be submitted at least three business days before the payment is scheduled, and banks may charge a fee for stop-payment orders.
4. Monitor your accounts: Lastly, you'll have to monitor your accounts to see if any unauthorized payments are made. You can dispute any unauthorized payments to get your money back, as long as you notify your bank or credit union in time.

Payday loans come with insanely high rates and fees that can leave you in a cycle of debt, so they should only be considered as a last resort. If you need to borrow money quickly but want to avoid the drawbacks of a payday loan, check out WalletHub's list of payday loan alternatives.

If you already have a payday loan that you're looking to get rid of, the best approach is to negotiate a debt settlement agreement with the lender. This may prevent credit score damage and a potential lawsuit, giving you valuable peace of mind.

No, unpaid payday loans won't just go away. Defaulting on a payday loan will likely result in your debt getting sent to collections, which can stay on your credit report for up to seven years, and you could be sued until the statute of limitations for your unpaid debt ends.

Here's What Happens If a Payday Loan Goes Unpaid:

• Additional fees and interest: You'll typically have to pay late fees and...

No, payday loans loans will not help your credit score because positive payment history on these loans is not reported to the credit bureaus. This means that paying consistently won't give your credit score any sort of positive growth. Payday lenders usually won't even run a credit check when you apply, so there won't be an initial dip in your score from a hard inquiry, either.

If you default on a payday loan, however,...

The main difference between bad credit installment loans and payday loans is that installment loans are paid back over time, whereas payday loans are paid back all at once. Other key differences include payday loans being much more expensive and much smaller than installment loans for people with bad credit.

Below you can see how personal loans for people with bad credit compare to payday loans in a number of important categories. Personal loans are the most...

The best way to get out of payday loan debt is to move the balance to a credit card or loan with a lower interest rate. Payday loans have extremely expensive interest charges, so transferring the balance to a card or loan that's less expensive will slow the rate at which interest accrues. That will enable you to put more money each month toward paying the principal balance, and get debt-free as quickly as possible.

Yes, debt management plans work with payday loans as long as the payday lender agrees to it. You can usually put all of your unsecured debts into a debt management plan, and the credit counseling agency assisting you may even negotiate for lower interest rates on your behalf. Just remember that the payday lender is not obligated to agree.

Before enrolling in a debt management plan, you should try to set up a payment...

A short-term loan that provides immediate cash is a payday loan. Payday loans should only be considered as a last resort because they can come with fees that equate to an APR of 400% or more and may have repayment terms as short as a couple of weeks, which can make the loan hard to manage.

If you can wait as little as one day, there are other options that allow you to borrow...

You should be able to get almost any payday loan with bad credit, as payday lenders specialize in bad-credit lending. Some may not even do a hard pull of your credit when you apply. However, while payday loans are the easiest type of loan to get approved for, they are also incredibly expensive. You should only get one as a last resort. There are personal loan providers, such as Avant, LendingPoint and some credit unions,...

You can borrow $750 with no credit check from Opploans or Advance America, among other lenders. None of these loan providers use applicants' credit history as a condition for approval, though it's important to note that approval is still not guaranteed. Lenders will look at things like your income and employment status to determine your ability to pay.

Best Places to Borrow $750 With no Credit Check

• Opploans: Loans of $500 - $4,000 available
...

Some quick loans do not affect your credit score because payment information does not get reported to the credit bureaus and there's no hard inquiry when you apply. Examples include payday loans and pawnshop loans. However, these types of loans could wind up affecting your credit score if they go unpaid and the debt gets sent to collections.

Other loans that you can get quickly, such as same-day personal loans, will affect your score because personal...