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What is a Payday Loan?
Unlike any other loans payday loans are designed to meet the borrower’s financial emergencies. The term payday loans means a short term loan also referred as paycheck advance, cash advances, payroll advances, deferred deposit loans, payday advances.

Payday loans means cash advances given to the borrower to meet his urgent financial need in return of which the borrower is suppose to write a postdated check in full amount (the total amount Of money he has borrowed) plus fees amount charged by the lender.

When a borrower needs a payday loan?
Payday loan is given when a person is into the middle of a monthly crisis or unable to meet his expenses, payday loan helps to cover such expenses. The loan period is generally of few weeks, month or a maximum of 45 days.

Process:
Considering a traditional market the borrowers visit a payday lending store and can borrow a loan by writing a postdated check in full amount with fees included on maturity he is liable to pay the check amount. The borrower is required to provide some legal Identification document along with the check.

In recent years with advancement in financial technology and electronic money coming into picture the process of applying for a payday loan has become online. Once Applicant fill the form online and can fax other legal documents where it is required the money is then transferred to his account by a secured transaction, and the loan amount and other finance charges is electronically withdrawn from the borrower’s Account on his next payday.


Maximum Amount: The maximum amount that a borrower can ask for is 700$ according to US payday loan standards


Interest Rates:

Although the interest rate vary, here are the details of standard interest rate charged by most payday loan providers

According to US Standards the interest charge is around 15% for amount less than or equal to 500$ and 10% above between 500$ to 700$

Note:

Abiding the rules

The borrower needs to provide his personal, Employment and Banking details to the lender. The details are authenticated with supporting legal document.

The payday lenders generally ask for a Social Security No, the lender in many case put this information in the database and check whether the borrower is eligible for the loan or not, if he has some prior debts to clear he might face issues to get eligible for a payday loan

The borrower need to make sure that he would be able to pay the loan on maturity otherwise he will be considered insolvent and would have to deal with the payday loan collection agencies.

In case of a bounced check the borrower is charged with increased interest amount due to failure in payment.

Source Authentication:

The borrower can buy a payday loan online. The borrower need to make sure that he is buying loan from an authenticated source. The user can check the website, phone no and address mentioned in the website. This will help him to make sure that he is providing details to an authenticated lender.

The borrower must read the terms & condition carefully before applying for the cash loan as there can be a chances of some hidden charges or payment condition which if not abided can put borrower into a legal issue.




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