Payday Loan
About Payday Loan
A payday loan is a high-cost, short-term loan for a small amount — typically $500 or less — that’s meant to be repaid with the borrower’s next paycheck. Payday loans require only an income and bank account and are often made to people who have bad or nonexistent credit.
How do payday loans work?
Online payday loans may go through a direct payday lender, which makes its own decisions about loans, or a broker, who sells your loan to the highest bidder.
Choosing a lender that uses a broker is riskier because you don’t know who you’re giving your financial information to. Not only is there a greater risk of fraud and unwanted solicitation with a broker, but it can also increase the overall cost of the loan.
If you must take a payday loan, choose a direct lender.
The cost of a loan from a payday lender is typically $15 for every $100 borrowed, according to the Consumer Financial Protection Bureau. For a two-week loan, that’s effectively a 391% APR.
If the loan isn’t repaid in full on the first payday, a fee is added and the cycle repeats. Within a few months, borrowers can end up owing more in interest than the original loan amount. According to the Pew Charitable Trusts, borrowers pay an average of $520 in fees to borrow $375.
That’s why payday loans are risky — it’s easy to get trapped in a cycle of debt and expensive to get out.
The amount you can borrow varies according to your state’s laws and your finances. Most states that allow payday lending cap amounts somewhere from $300 to $1,000.
To qualify for a payday loan you typically need an active bank account, an ID and proof of income such as a pay stub. You must be at least 18 years old. Some lenders also require a Social Security number.
Features of Payday Loan
Easy loan Repayment
100% Transparency
Quick approval
Eligibility Criteria
- You must be a Salaried Employee
- Age: 20-50 years old
- Net Monthly Income must be more than $1000.
- No defaults in the last 24 months.