An online payday loan is simply the online form of a payday loan. A payday loan, also known as a cash advance, payroll advance or deferred deposit loan, is a short term unsecured loan which is intended for emergency use only. When you take out a payday loan, you are expected to repay it on your next pay day. You don't need to have good credit to get an online payday loan; all you may need to do is prove that you have some form of employment. Not all payday loan companies require proof of employment.

Why would you need an online payday loan?

There are plenty of emergencies that could require you to get a payday loan, especially if you live month-to-month with little or no savings. Here are some examples of emergency situations in which a payday loan could help you out:

• Rent is due; your company is late processing your check. If you don't pay your rent, you'll be evicted. By obtaining an online payday loan, you can pay your rent and when your paycheck arrives a few days later you can pay back the loan company.
• Your car has broken down and you need it to get to work (and since you don't have a working car, you can't drive to a physical payday loan outlet). If you can't work, you can't earn money. Get an online payday loan and you can fix your car, go to work, get paid by your employer and repay the loan.
• You have a painful bacterial infection and need antibiotics. You don't have health insurance. If you wait, your condition will only get worse. An online payday loan can give you the money for the antibiotics so you can get better instead of worse while waiting for your paycheck.

How does the online payday loan process work?

When you obtain an online payday loan, you complete an online loan application or send your application via fax. If the company requires employment verification you can fax pay stubs to prove your income. Your loan will be direct deposited to your bank account. On your next payday, you will be charged electronically for the amount of the loan plus the interest you owe.

Are online payday loan companies legitimate?

Payday loans have a dubious reputation in some communities. The reason for this is not that payday loans are a scam, but rather that many of the people who get payday loans aren't necessarily the people they're suitable for. They should not be used as a routine financial source, or they can lock you into a cycle of debt. You should only use them when you have an emergency, as was intended; you are responsible for this. When you complete an application for an online payday loan, you are told exactly how much interest you will owe and when the payment will be taken from you. If you know you'll have the money, then there is no reason you shouldn't get the loan and take care of your emergency. If the company doesn't require you to verify your employment, you shouldn't take the loan unless you do indeed have money coming in.

Take responsibility for your financial life and borrow only what you know you can afford. There is no reason to accept defeat in a crisis if your paycheck is late or something unexpected arises which impacts your ability to work and survive. If you have the necessary income on the way, an online payday loan may just be the means to saving yourself from disaster.