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Step 1
Know the difference between a "no verification" and a "verification" loan. Loans that require verification ask you to provide proof of residence, income and credit history. They draw from the typical model of lending, which looks at your past borrowing history and credit report. No-verification loans don't ask for any of these items. This makes you, the borrower, a higher credit risk because the lender does not know anything about you. As such, no-verification loans charge much higher interest rates than traditional loans.
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Step 2
Visit a local payday loan provider or find one online. Most payday loans work as follows: You write a check for a certain amount to the payday lender and postdate the check for the day you should receive your paycheck. The lender gives you cash money (or deposits money directly into your checking account), minus a processing fee. The day you receive your real check, deposit it in your bank. The lender cashes your check at that time.
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Step 3
Understand the high rate of interest charged on payday loans. Most people are unaware of the high interest rates associated with such loans, which are actually illegal in some states. Say you write a check for $225 to a payday lending company and they instantly give you $200 cash, while keeping a $25 processing fee. You may think $25 is a small price to pay for such convenience, but actually, it equates to a 650 percent annual interest rate. Even credit cards, with their exorbitant 20 to 30 percent interest rates, don't achieve such a rate of return. If you can't pay back your payday loan, you can "roll it over," usually a maximum of three times, but each time you do this, you incur another service charge.
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Step 4
Keep your promise when using payday lenders. If the check you write bounces on your payday or you don't pay the lender back, the lender has every right to come after you legally and assess additional fees and penalties.
