What Is A Payday Loan

What Is A Payday Loan



What is​ a​ Payday loan?
Payday loans are small sums,​ short-term,​ high interest loans .​
They are targeted towards those individuals who need a​ small amount of​ cash for a​ short period of​ time .​
It is​ the​ opportunity for individuals to​ get access to​ quick cash without the​ need for extensive credit checks .​
Those individuals who cannot attain credit cards,​ have no friends or​ family to​ loan them money,​ and cannot procure an​ advance from their employer,​ often have nowhere to​ turn for a​ bit of​ extra cash to​ fill a​ very short term need .​
Pay Day loans has a​ variety of​ titles including; cash advance loans,​ check advance loans,​ quick cash loans,​ post-dated check loans,​ and deferred deposit check loans.
The borrower writes a​ personal check payable to​ the​ lender for the​ amount they desire to​ borrow plus the​ loan fee .​
The lending company then gives the​ borrower the​ amount of​ the​ check minus the​ loan fee in​ cash .​
So for example,​ if​ you​ wanted to​ borrow $100 for two weeks you​ might write a​ check for $115 and receive the​ $100 in​ cash .​
A Payday loan is​ one of​ the​ most expensive legal lines of​ credit that a​ person can procure .​
(an annual interest rate of​ 400 – 700%),​ on​ top of​ that,​ unlike a​ regular loan where if​ you​ default you​ can be hassled for late payments,​ a​ Pay Day loan company can by contrast simply deposit the​ check .​
When it​ bounces you​ will have committed a​ prosecutable crime that the​ Payday Company can use as​ leverage to​ get you​ to​ pay at​ any cost .​
In effect,​ they can threaten you,​ almost immediately,​ with criminal proceedings in​ a​ way that regular creditors cannot.
Critics say the​ loans are predatory and can confine low-income people to​ endless poverty .​
But supporters say the​ industry's popularity is​ proof payday stores provide a​ valuable service - providing financial help to​ customers snubbed by banks.
Planed Legislation would limit borrowers to​ a​ maximum $600 loan in​ a​ 31-day period and let lenders charge service fees of​ 11 percent to​ 15 percent .​
The bill also would require payday lenders to​ get a​ license from the​ state and limit customers to​ one transaction at​ a​ time.
Source: www.loans-money-infoweb.com/




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