This is a question was originally posted on Quora.

How do you define legitimate?   Almost every payday lender is following the laws of their locality or they would be shut down.  I assume you are concerned about the perceived unfairness of their terms and in this regard I think it’s safe to assume few if any payday lenders offer good terms.

Payday lenders offer 2 components that provide value despite the high cost of credit.  Payday loans are quickly approved & funded plus they are granted ‘judgement free’ relative to many banks or credit union.   These 2 factors are important for many of their customers especially those who need money fast.

A smart alternative would be credit unions many of which have payday loan alternative products which offer faster approvals than a regular loan and don’t require a credit check.  By eliminating many of the traditional underwriting steps these loans are also ‘judgement free’ in most instances.  Keep in mind these payday loan alternatives cost more than a traditionally approved loan but are not nearly as expensive as the typical payday loan.