Payday loans are loans taken at a very high interest rate and for a very short duration of time. It is so because usually this type of loan is taken in the time of urgency. With such kind of a loan, not only does the borrower have to pay a hefty sum of interest, they are also required to pay an extra fee (and quite high as compared to others’) for exchanging the loan for cash. Often the interest rate and the fee (taken to turn the loan into cash) can even amount to equal, if not more than, the borrowed sum. They are also known as Cash Advance loan or Check Advance Loan.
These loans are to be repaid either through cash or a post-dated check in the name of the lender, which is either to be deposited at the bank upon mutual agreement or on their payday, depending upon the situation.
Payday loans, though has a high rate of interest, is a very popular kind of borrowing method. The reasons for this popularity is the ease of acquiring the loan, in a short time and it is given to people who have a low or bad credit score.
The rate of interest for this loan reaches 17.50% per 7 days and most of the loans sanctioned are for a tenure of 30 days or less. The loan amount is usually in between the range of $100 to $2,000.
The payday loans are also available to people through online websites. These companies provide all the necessary details on their website. If it is an urgent requirement, but you cannot go to the store, then online payday is a good way to get it and get it fast.
In order to get the loan, you will need to fill up an online form giving all the details, like your personal information, contact information, income etc. This is the easiest way to get the amount transferred (almost) instantly to your bank account. Through online payday, you can also opt for installment payments, where you pay little at a time until the loan is repaid.
However, the rates of interests and the acceptance of your loan depends on the state you reside in. Because of the fact that the 32 states that allow payday loans have various rates of interests, you eligibility depends on your area of residence.
Image credit: keloland.com