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Payday Lending

A payday loan is a small, high-fee, short-term loan. The loan is usually due in 45 days or less, with an additional fee charged for taking out the loan. You may only take eight payday loans in a 12-month period.

To take out a loan, you can choose between:

  • Writing a post-dated check
  • Authorizing an automatic withdrawal from your bank account for the amount you want to borrow, plus the fee

To pay back the loan, your options are:

  • Paying it back in cash
  • Letting the lender cash your check
  • Executing the automatic withdrawal

Keep in mind that in the state of Washington, the most you can borrow is $700 or 30% of your gross monthly income—whichever is less. The fee on a $700 loan is $95, and if you’re late paying it back, the lender can charge you an additional $25. This means that a payday loan can add up to as much as $820! So first, consider alternative solutions. If you still feel that a payday loan is your best option, here are some tips to remember:

  • Make sure the lender is licensed by the state by calling 1-877-RING-DFI (746-4334) or verifying a license online at
  • Comparison shop for the lowest fees and penalties
  • Avoid borrowing from more than one lender at a time
  • Borrow only as much as you can afford to pay with your next paycheck
  • Keep track of your due date and repay on time
  • Take advantage of local consumer counseling services. Many of these organizations offer help with budgeting, credit repair, debt repayment, and more.

Find Your Local Consumer Credit Counseling Service


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