by Ben Sweiry ·
Modified on 15 September, 2022
In the US, the maximum amount you can legally borrow in the form of a payday loan is $35,000, but this will vary depending on which state you live in.
With Dime Alley, you can apply for a payday loan from anywhere between $100 up to $35,000. The amount you will be able to borrow will ultimately depend on several factors, such as your credit history, income and current financial situation, but it is important to note that when you start to apply for the large amounts such as $5,000, $10,000 or higher that you might need to have a pretty good credit score or you need to start using collateral such as your home or car to be eligible.
Key Points:
- The maximum possible loan you can get in the US is $35,000, while loans start from $100.
- The average loan amount in 2021 was $375.
- The maximum amount you can secure will depend upon where you live. Some states have limits on how much you can borrow, such as California whose maximum is $300.
- These limits are in place to protect you, and make sure you don’t find yourself in unmanageable debt. This is why the Consumer Financial Protection Bureau keep a careful eye on loans providers.
What is the Max Payday Loan?
How much you can borrow will vary depending on where you reside.
Some states have banned payday loans altogether, such as New York and Pennsylvania. Meanwhile, some states which permit payday loans have caps on how much lenders can provide, with California’s capped if you want to borrow $300 and Texas’ being unlimited.
The amount you can borrow will also rely on your financial history. Those without a credit history, and those who have a rocky one, are less attractive to lenders and will likely be offered smaller loans, if at all.
Why Are There Limits?
Simply put, there are caps on how much you can borrow to protect you! Loans are there to help you and tide you over when you can’t quite afford what your life is costing. However, as convenient and helpful as loans may be, they have associated risks.
Loans come with very high interest which can stretch to as high as 600%. If you fail to repay your loan, you can encounter additional fees, and your credit record can be hurt. As such, the Consumer Financial Protection Bureau, alongside state legislatures, apply regulation to loans to protect you from encountering further problems.
Am I Eligible For A Payday Loan?
You simply need to meet these requirements:
- Be at least 18 years of age
- Social security number
- Be an American citizen
- Have a minimum monthly income of $800
- Have a current account for us to deposit your loan into
When applying for a loan with Dime Alley, do not worry about your credit score before applying. We accept applicants with a variety of credit histories, so leave that to us!
What Should A Payday Loan Be Used for?
Payday loans should be viewed as a short-term financial aid.
Payday loans offer a helping hand during short-term financial troubles, such as paying off medical bills or an unexpected cost. Payday loans should not be viewed as a long-term source of financial security. This is mostly because of the high interest rates that typically accompany the loans, making them unsustainable to repeatedly take out.
Before taking out a loan, you should be aware of the consequences of not meeting repayments. Defaulting on repayments can result in serious damage to your credit score, additional fees and threatened legal action. These issues can ensue no matter how big or small a loan may be.
You should also be aware of terms such as how long you have to repay your loan and the interest on it before committing yourself to your lender.
Additionally, you should familiarize yourself with the restrictions on what loans can be used for. Money secured via a payday loan cannot be spent on anything illegal and in most cases cannot be used for gambling. Restrictions are imposed by individual lenders and by individual states.
Can I Have More Than One Payday Loan At Any One Time?
Yes, it may be possible to secure multiple loans at the same time.
Given that Payday Loans are intended to cover short-term costs, consumers should avoid borrowing more than one loan at a time.
Rather, if you are still in need of more funds, you should consider alternative means, such as determining whether you are eligible for cash assistance, or asking friends and family for support. Of course, speaking to a financial adviser may be preferable if you find yourself not sure of how to proceed.