Payroll Loans and How to Get a Loan with Pay Stubs

A payroll loan may be just the thing that you need if you have an unexpected expense that occurs between paydays. Also known as a cash advance, these kinds of loans are short-term for small amounts of money, up to $1,500, to assist until the next payday. In most cases the person will have access to the loan by the next business day.

There are strict use limits for cash advances in some areas that limit the nominal annual percentage rate (APR) that the payday lender is allowed to impose. Some jurisdictions have entirely done away with payday loans while others have opted to instead place very few restrictions on these kinds of loans.

When considering a payroll loan you'll want to be careful that you know all of the fees and rates that apply, otherwise you may find yourself in a worse situation than the one you began in.

Those seeking a loan go to a payday lending service and procure a cash loan, with their full payment due when the borrower next gets paid. In the US, the finance fees on a payroll loan are usually in the range of 15 to 30 percent of the total sum for the two-week period. The borrower gives the lender a postdated check in the total amount of the loan plus any fees that they will occur. On the maturity date, the person borrowing the money is expected to return in person to the store and repay the loan in full. If the borrow does not repay the loan, then the lender is legally entitled to redeem the check.

The borrower must make sure that they have enough money to cover the check offered to the lender, or they run the risk of bouncing that check, having to pay the fees for that and they still have to pay the costs of the loan. There is also the chance that the loan may have additional fees and/or a higher interest rate if they do not repay their loan. For those that can't repay their cash advance at the time that it's due, members of the national trade association have to offer them, at no extra cost, an extended payment plan. Extended payment plans are mandatory by state law in some states.

As a requirement, borrowers have to bring with them one or several recent pay stubs in order to prove that they have a steady source of income and bank statements.