Payday loans are short-term loans with high-interest rates and small loanable amounts. They are designed to meet the emergency needs of borrowers. Generally, you do not need collateral to secure a payday loan and the application can be processed within a day or two. However easy they are to qualify for, some basic requirements need to be met.
According to the Consumer Financial Protection Bureau (CFPB), to be eligible for a payday loan, you must:
- Be at least 18 years old
- Provide some proof of income
- Have an active checking account
- Present valid identification, which could be your passport, driver's license, or any other government-issued ID
In 2020, the CFPB removed a 2017 Obama administration requirement that mandated payday lenders evaluate borrowers' ability to repay a loan before approving their application. Although this is no longer a must, many payday lenders still do this. Generally, an applicant’s ability to repay the loan in good time may be judged by their monthly income and debt-to-income ratio rather than their credit ratings.
In most cases, you are able to get a payday loan offer as long as you meet the above-listed requirements.