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What is a Payday loan?
A Payday loan is a small, short-term, high-rate loan. It is also referred to as: cash advance loan, cheque advance loan, post-dated cheque loan, deferred deposit cheque loan or cash loan.
Payday Loans are arranged for people in employment who find themselves in a situation where they are short of immediate funds.
A Payday Loan can assist you in this situation with a low amount short term loan.
Loans are repayable on your next payday, although it is possible to renew your loan until subsequent paydays. To apply for a loan you must be in employment and have a bank account with a cheque book. A poor credit rating or debt history is initially not a problem.
Usually, a borrower writes a personal cheque payable to the lender for the amount he or she wishes to borrow plus a fee. The company gives the borrower the amount of the cheque minus the fee. Fees charged for payday loans are usually a percentage of the face value of the cheque or a fee charged per amount borrowed.
The company agrees to hold the cheque until your next payday. At that time, depending on the particular plan, the lender deposits the cheque, you redeem the cheque by paying the amount owed in cash, or you roll-over the cheque by paying a fee to extend the loan for another two weeks.
A payday loan is very convenient if you find yourself a little short of funds at any time. The most obvious drawback of a Payday Loan is that they can be expensive. The interest rate varies from lender to lender so do shop around to find the best deal.
If you decide you must use a payday loan, borrow only as much as you can afford to pay with your next pay cheque and still have enough to make it to the next payday.
You may freely reprint this article provided the author's biography remains intact:
About the Author
John Mussi is the founder of Direct Online Loans who help UK homeowners find the best available loans via the www.directonlineloans.co.uk website.
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Payday loan show on The CW generates some real interest (Miami Herald)
The economy is worse than we thought. Even The CW is shoving aside its teenaged psalms to Jimmy Choo and Marc Jacobs for shows about loan sharks and outsourced deities. Next I'm afraid we'll see Henry Paulson on TV announcing that the Treasury Department has seized Gossip Girl and offering a reverse auction for Serena and Blair. Critics call Prop. 200 a trap, not payday loan reform (Tucson Citizen)
Would you knowingly take out a loan with a potential 391 percent annual interest rate that included allowing the lender to electronically raid your bank account for payment? Anti payday loan reformers play into economic fears by urging a 'no' vote - Eye on Ohio (The Plain Dealer)
THE AD: "No on Issue 5", 30-second television ad PRODUCER: Ohioans For Finacial Freedom, a group mostly sponsored by the payday loan industry. WHERE TO SEE IT: Television and by clicking here. RATING: 2 on a scale from 0 (misleading)... Financially Desperate People Turning to Payday Loans (KLAS Las Vegas)
While some businesses are closing their doors, payday loan stores are thriving in these tough economic times. People are using the fast cash approach to pay bills, buy food, even make their house payment. Schwarzenegger to U.S.: State may need $7-billion loan (Los Angeles Times)
In a letter obtained by The Times, the governor warns that tight credit has dried up funds California routinely relies on and it may have to seek emergency aid within weeks. California Gov. Arnold Schwarzenegger, alarmed by the ongoing national financial crisis, warned Treasury Secretary Henry M. Paulson on Thursday that the state might need an emergency loan of as much as $7 billion from the ...
Energy Department takes loan applications (UPI)
WASHINGTON, Oct. 6 (UPI) -- The U.S. Department of Energy announced it has received 19 federal loan applications for nuclear plants. Schumer wants student loan market to be protected (AP via Yahoo! Finance)
Sen. Charles Schumer says particular attention needs to be paid during the current financial upheaval to make sure the student loan market is protected from the credit crunch. RLPC-Russian NLMK increases pricing on loan-bankers (Reuters via Yahoo! Singapore News)
LONDON, Oct 6 (Reuters) - Novolipetsk Steel has increased the margin on its $2 billion, 364-day unsecured bridge loan by 45 basis points (bps) to 145-320 bps over LIBOR as a result of the credit crisis, banking sources close to the financing said on Monday.
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