How Do 30 Day Payday Loans Work?

Some lenders may offer a month-long loan term, which can make it easier to pay back the money.

Pursuing a personal loan or trying to get a credit card may require more time and effort than is necessary if the problem will only exist for 30 days or less but needs to be handled quickly. In these cases, a 30-day payday loan may be a better solution.

Are Payday Loans Available for Longer Than a Normal Payday Period?

Payday loan companies offer small personal loans of $100 to $1,000 to help get customers from one payday to the next. In most cases, these loans are offered for a loan term of around two weeks since a majority of Americans get paid weekly or semi-monthly.

In reality, many lenders offer a wider range of loan options with the one-month term being popular among customers. For a variety of reasons to be discussed below, 30 day payday loans offer some benefits when compared to traditional borrowing options.

Dispelling Negative Notions About Payday Loans

Bad press and skeptical individuals have created a negative impression of the payday loan industry. There may have been a time when a few payday loan companies operated in ways that most would consider unethical, but that was long ago. The industry has matured a great deal over the past 10 to 15 years. As a result, the industry as a whole has been able to eliminate many bad actors.

Along with the skepticism aimed at payday loan companies, there has also been this overriding feeling that only desperate and irresponsible people would ever pursue such a loan. Studies indicate the average payday loan borrower is pretty much the same person as the average American. Here are a few characteristics of the average payday loan borrower:

  • They have an average annual income of just under $40,000
  • A large majority of them have at least a high school education or higher
  • Around half of them are actually homeowners
  • Many have bank accounts and steady full-time employment

Benefits of 30 Day Payday Loans

There is a cost involved with taking out a payday loan. If nothing else, the interest rates are going to run higher than rates offered on other forms of borrowing. With that in mind, the prospective borrower may want to know what benefits they can derive from 30 day payday loans. These include:

  • Quick Approval Process

    In-Store or online, payday loan companies can usually approve applications in less than an hour. With the proper documentation, a loan could literally be approved in minutes with cash in hand in as soon as one business day.

  • Minimal Qualifications

    As long as a potential borrower can present proof of full-time employment or a steady income, a regular payday schedule, adequate income, citizenship, and a bank account, they might be able to qualify for a loan.

  • Spendable Cash

    While some loan instruments may limit the borrower's access to actual cash, payday loans are available as 100 percent cash to be used as the borrower wishes.

  • 30 Days to Pay

    When the borrower expects they will need more than one payday to pay back a payday loan, a longer term may offer more flexibility.

  • Limit Borrowing Efforts

    If the borrower anticipates having issues paying the 1 month payday loans back in a single payroll period, a longer loan term will provide more time to make the required payments without the borrower needing to seek new financing.

  • Eliminate Extra Loan Fees

    Borrowers can avoid the multiple fee requirements they may encounter if they borrowed more frequently.

Other Short-term Borrowing Options

The financial marketplace offers alternatives to payday loans 30 days to repay. For prospective borrowers who need to borrow funds for a period of 30 to 90 days, here some options worth investigating.

Overdraft Protection

Many banks offer checking accounts with overdraft protection. When a borrower needs extra money to get through a few weeks, the ability to write a check that exceeds their checking account balance can be an alternative. Since the overdraft protection provision has already been approved, the overdraft does not require additional bank approval. The account-holder is responsible for paying the applicable interest on the outstanding overdraft balance until such time as they can deposit enough money to cover the overdraft.

Revolving Line of Credit

Homeowners are sometimes offered a revolving line of credit with the home as collateral. With a revolving line of credit in place, the borrower has the ability to draw down cash as needed and pay it back when able as long as they make the required monthly interest payments on any outstanding balance.

Pawn Loans

When someone needs cash fast and has valuable collateral such as electronic equipment or expensive jewelry, a pawn loan may be a possible alternative. Most pawn shops offer loans of up to 50 percent of the appraised value of the item being offered as collateral. The process is fast, and the transactions are handled in cash. While this can be a viable solution, caution is warranted. The interest rate might be aggressive and should the borrower not return in time to reclaim the collateral, it becomes the property of the pawn shop.

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