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Getting Approved for Payday Loans with Bad Credit

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Payday loans are a double edge sword. They are often used by people with low income and poor credit to make ends meet when they experience an unexpected significant expense. The good thing about payday loans is that bad credit rarely excludes you from getting one. The bad news is that they are expensive if not paid back right away.

What Exactly is a Payday Loan?

A payday loan is simply a loan for the amount of your next paycheck. Usually, these loans are meant to be paid back in less than two weeks. The interest on payday loans is quite high compared to long term loans, but this is because they are only meant to last for a few weeks at most.

How Do You Get Approved for a Payday Loan With Bad Credit?

Lenders specifically target payday loans towards people with poor or no credit, so your credit history rarely, if ever, is an issue when applying for a payday loan. All you need to get a payday loan is to have a job and a bank account. You need to be sure to bring your last pay stub to prove your income.

When you apply for your loan, you are also be expected to provide either a signed check or permission to make an electronic withdrawal. This is a fail-safe by the lender to make sure they can collect. You are expected to return to the store and repay your loan, but if you do not pay it off, then the lender can use the check or your bank account information to collect the debt.

How Much Can I Borrow?

This question has two answers. Individual states set limits to the maximum amount you can borrow, and it varies from state to state. These limits are usually between $300 and $1000. States have implemented these limits to protect people from predatory lending practices, which can include large payday loans with high interest. You can find the information on individual states here.

The other limit is how much the lender agrees to loan you. This depends on your income, expenses, and your payday loan history if you have one. The lender is not going to lend more than they think they can collect, so don’t expect to get approved for a $1000 loan if you have an income of $1100 and expenses of $700.

What Interest Rates Can I Expect?

Interest rates are another area of payday loans that state governments have begun regulating. Some states, such as Alabama, limit the interest that lenders can charge. In Alabama, the interest rate cannot be more than 17.5%, for example. Other states have different limits, and some don’t have any restrictions. Be sure to check your state laws here as well as read the fine print before you agree to the loan.

What About Online Payday Loans for People With Bad Credit?

Generally, online lenders are less regulated than their brick and mortar cousins. This is because they can sidestep state laws regulating the payday loan market. Online lenders usually charge higher interest rates. This is because they must follow the laws of the state they registered the company in, not the customer’s state. So, an online lender can set up their company in a state with few restrictions and service the entire country.

Bonsai Finance can help sort through different lenders with their helpful online loan finder tool. This makes it easy to see what you might qualify for and what the terms will look like, before you apply.


Payday loans bad credit are a good option if you need money for an unexpected expense. While people often criticize them for charging high interest rates, over 300% APR, the fees are not as bad as they seem. This is because payday loans are meant to be paid off in two weeks, so they usually have a cost of around $15 per $100 loaned.

Getting a payday loan for bad credit is not difficult. Just be sure to bring your last pay stub as proof of income.

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