If I want to take out a payday loan, do I have to put up something in return like if I went to a pawn shop?
No. Payday loans are considered a form of “unsecured” debt, which means you do not have to give the lender any collateral, or put anything up in return like if you went to a pawn shop.
Instead you will have to give the lender permission to electronically take money from your checking account, or provide a check for the repayment amount that the lender can deposit when the loan is due.
If you do not have enough money in your account when the lender tries to withdraw the payment, your bank or credit union will likely charge you fees for overdrawing your account.
Ask CFPB provides general consumer information. It is not legal advice or regulatory guidance. The CFPB updates this information periodically.
Ask CFPB includes links or references to third-party resources or content. The CFPB does not endorse the third-party or guarantee the accuracy of this third-party information. There may be other resources that also serve your needs.