PayDayOne.com is a website specializing in payday loans for people seeking up to $1,000. Pay Day One offers to approve loans quickly enough that you even have the opportunity to have the money deposited into your account on the next business day if you complete your application by the time the clock on their homepage counts down.
In general, payday loans are meant for people who have an immediate need for cash and don’t seem to have any other means of getting it. Since the people who apply for these loans often do so when in desperate circumstances, the companies can charge extremely high interest rates, so high the nationwide average has reached 390% APR.
People who defend the payday loan industry claim that these rates are so high because the companies must be able to immediately provide the money to their clients, and the default rate on payday loans is so high that companies must have a way to offset their losses. Unfortunately, most of the people who are in need of a payday loan don’t have any other options, because traditional banks and institutions won’t help them.
So Is Pay Day One a Scam?
Well, it depends on how you define a scam. PayDayOne.com is very upfront with all their terms. They advertise clearly that their average APR is around 455%, which is substantially higher than the national average. They even show you a timetable that lists what your payments would be, depending on how much you borrowed, what your APR was, and how long it took you to pay the loan back.
However, that being said, just because Pay Day One isn’t necessarily a scam does not mean it’s a good idea to borrow money from them. The interest rates of payday loans are so exorbitantly high, and their payback schedules so intense, it’s almost impossible to successfully pay them back.
For example, their chart shows that if you borrow $1000 that you wish to pay back in monthly payments, you’ll have to pay them $348.33 a month to keep up with their payment schedule, eventually resulting in paying them $2,786.50, almost three times what you originally borrowed, and in well under a year. It’s hard to imagine someone’s circumstances being that they need to borrow $1,000, but then magically have an extra $348 to spend every month thereafter.
Another serious problem that you should consider is that Pay Day One is an online payday company, servicing almost half the country. But each individual state has their own rules and regulations for the operations of payday loan companies. The interesting thing about PayDayOne.com is that they make you choose what state you are in before showing you their loan terms, which leads an individual to believe that they are paying attention to these individual rules.
However, this isn’t the case. For example, the state of Illinois doesn’t allow payday loan companies to charge more than $15.50 in interest for every $100 you borrow, which translates to $155.00 in interest. PayDayOne.com is charging almost $1800 in interest. But, since they are an online company not based in Illinois, it is unclear whether or not they must abide by these guidelines.
The unfortunate reality is that payday loan companies like Pay Day One don’t need to be a scam in order to be a bad idea. While they may offer a quick fix to your immediate money problems, they’ll only cause worse money problems for you down the road.
Note: If you’re interested in learning more about Payday Loans check out our detailed guide, “Payday Loans Explained: Should You Ever Get One?” for more info.