PayDay
Loans Explained;
A Payday loan is a very short term loan based on your income and your future paycheck. It is a cash advance which is due by the borrowers next pay day. Almost anyone can apply for a payday loan as it requires no credit checks or collateral. These loans are ideal for emergency situations and the loan amounts typically range from $250 - $1500.
As there are no credit checks, these loans are useful for people who have bad credit, no credit or who are bankrupt. The main disadvantage of payday loans is the high level of interest which is charged.
In fact over a year, it is not uncommon for triple digit interest rates to be charged.
The one requirement for a payday loan is a bank account as any loan amount will be transferred directly into your bank account. You will need to give the lender a postdated check which will be repayable from your next paycheck, usually within 2 weeks. When you put money into your account from your next paycheck, the lender will cash your check.
Payday loans are useful if you are experiencing cash flow problems or if you need cash for an emergency but borrowers must remain aware of the high interest rates attached to these loans. |
