Payday Loan is
Unsecured
Loan : loan without any guarantee from the borrower
Short
Term Loan : 7-30 days – usually 14 days or until the next
payday of the borrower
Small
Cash Advance : usually $500 - $ 1000 but some payday lending
may offer up to $1500 that borrowers agree to repay out
of their next paycheck or regular earnings.
Lately payday loan is
also popular known as cash advance or personal loan. With
payday loan you can get instant money within 24 hours.
Therefore, this loan is very suitable for emergency need.
Since payday loan have
such a short period of time to maturity, the charge of
borrowing, indicated as an annual percentage rate (APR),
is quite high. Usually fees charged on payday loans comprise
from $15 to $25 on every $100 for 2 weeks payday advance.
That may be equal to APR about 390-650%. That’s why this
loan is not suitable for covering your monthly expenses.
If you take payday loan just to pay your monthly bills,
all you have to do is asking for dispensation and manage
your monthly budget.
The payday loans concept
is that you get a payday earlier to receiving your pay
check and when you have received it you are expected to
repay your loan. The procedure is very simple to apply
a payday loan. Just complete the application form about
your personal identification, personal checking account
and job descriptions and wait for the payday lender approval.
Once approved, the borrower gives a postdated personal
check to the payday loan lender or a authorization to
withdraw some amount of money from the borrower’s account
and in return, the borrower will receive cash after deducted
by the loan fee. So for $100 payday loan with $15 fee,
the borrower may write a postdated check for $ 115 and
receive $100 only by cash. Before you write a check be
sure to read all the terms and conditions and do not hesitate
to ask to the customer service about the points you don’t
understand.
At the due date of the
loan, the borrower should pay back the loan. You can exchange
the original check and pay back to the payday loan lender
or let the lender deposit your check. If you can’t pay
back the money at the specified date, inform your payday
loan lender and ask for renewing or rolling over the loan.
If you don’t inform your payday loan lender and your deposit
account have insufficient funds you’ll be charged for
NSF (Non Sufficient Fee) charge on this account.
