What Are the Pros and Cons of Payday Loans?


63% of Americans lived paycheck to paycheck in September of 2022. Yikes! And this percentage has remained pretty much the same since then.

So what do most Americans do if they need immediate money for an emergency? Payday loans may be the answer they’re looking for. 

But what is a payday loan and how does it work? Read on to learn about this and some of the pros and cons of payday loans. 

What Is a Payday Loan? 

Have you not heard about payday loans before? Really?! It’s extremely unlikely that you haven’t at least heard or seen the term before. 

You may also not think you know what the term means but, in actuality, you do. Being in this position is a bit more understandable. Payday loans go by so, so many other different names. 

Here are some of the other names a payday loan goes by: 

  • Deferred deposit transaction 
  • Payday advance loan
  • Paycheck advance 
  • Short-term loan 
  • Cash advance 
  • Fast loan 
  • Fast cash 

By any name, this type of loan still smells as sweet as cash.

How Much? 

But don’t expect to get too much cash from this loan. A payday loan, paycheck advance, fast cash, etc., is usually a small-dollar loan. You can usually only get a few hundred dollars to just over a thousand from this type of loan. 

How Long? 

You can usually have the money for a few weeks before you need to pay it back. Typically, the money is due on your next payday. This is probably the reason why one of this loan’s many names is “payday loan”. 

What’s It For? 

Payday loans are great for when you have a financial crisis that you need to immediately fix. Say that a meteorite falls through your roof (hey, it could happen). If the guys at the nearest science lab don’t deem it valuable enough, you’re probably gonna need to fix that hole in your roof yourself. 

However, roofers can get expensive. Also, you may not have enough money in your bank account or credit card account. A payday loan is another option that can get you the money you need right away. 

How Do Payday Loans Work? 

So how does the process of getting a payday loan work? You’ll probably find that the whole process goes by smoother and faster than a day at an amusement park. 

Step 1: The Loan Application Process 

All that a potential loan client needs is a form of ID, proof of their income, and a checking account in good standing. Do you have all that? Then you can easily fill out an application on an online loans site and will probably get it approved. 

In addition, payday loans are “no credit check loans”. So your lender won’t run a credit check. Even if your credit score is in the toilet, you can still get a payday loan. 

Step 2: Provide Bank Account Access 

In many situations, lenders will ask for an ironclad guarantee that you’ll pay your loan back. You’ll usually have two options for how you can give them this guarantee. 

In one case, they’ll just ask you to give them bank account access. They’ll then withdraw the repayment funds on the date you specify. 

Another option is to give them a signed check. You can write a date on this check that’s on or after your payday. The loan company will only be able to withdraw the money on or after this date. 

Step 3: Repay the Payday Loan 

On the date you requested, you’ll pay back the loan. However, you won’t just pay back the money you borrowed. You’ll pay back that money and a flat fee. 

Now here’s where a lot of people get into some deep, deep doo-doo. These flat fees can range from around ten dollars to close to fifty dollars per one hundred dollars you take out. The max amount a loan company can charge depends on your state law. 

This is why it’s never a good idea to use payday loans to buy luxury goods on impulse. If you do, you can easily get yourself into a cycle of debt that lasts until the universe implodes. It’s best to save up for luxury goods and get them at a later date. 

The Pros and Cons of Payday Loans

Still, as long as you handle it correctly, a payday loan can benefit you in several ways. If you don’t handle it correctly, all the downsides of a payday loan can hit you hard. 


So, while looking back at the description of a payday loan, let’s pull out some of the benefits. Payday loans get you money extremely fast and it’s very easy for anyone to get approved for a payday loan. Even if you have credit as low as the Mariana Trench, you’ll still get approved if you have an income and a good bank account. 

Another good thing about a payday loan is that you don’t need to secure it. With regular loans, you usually need to offer something up as collateral. This isn’t the case with a payday loan. 


High fees (in comparison to other loan types) are the biggest con for payday loans. Another fact to note is that payday loans don’t help your credit score. Payday lenders don’t usually report how well you pay your loans back to the credit bureau. 

However, as long as you’re careful, the high fees may not hurt you too much. You also shouldn’t use payday loans often. This way, you won’t hurt your credit score that much. 

Get a Payday Loan From Us 

Now you know how payday loans work and some of the pros and cons of payday loans. The next time you have a financial emergency, you can consider getting a payday loan as an option. 

And if you need to get a quick loan, get one from us at King Cash. Just type King Cash or King Cash in your search bar (your search engine of choice should take you there anyways), find our site, and apply for one of our online loans today. If you want a faster route, click this link to get to our loan page. 

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