The quick cash infusion is nice, but when you apply for a payday loan, you may wind up getting more than you bargained for. As the Consumer Financial Protection Bureau A payday loan is a type of short-term borrowing where an individual borrows a small amount at a very high rate of interest. The borrower typically writes a post-dated personal check in the amount they wish to borrow plus a fee in exchange for cash. These loans are also called cash advance loans or check advance loans. Short-term payday loans are generally expected to be repaid within a month, or by the time your next pay period comes around. Payday loans are short-term cash loans based on the borrower's personal check held for future deposit or on electronic access to the borrower's bank account.
Borrowers write a personal check for the amount borrowed plus the finance charge and receive cash. The average loan term is about two weeks. A payday loan is a small, short-term unsecured loan, "regardless of whether repayment of loans is linked to a borrower's payday." The loans are also sometimes referred to as "cash advances," though that term can also refer to cash provided against a prearranged line of credit such as a credit card. Looking into a Payday Loan? It's important to understand how they work. Click to learn about application requirements, loan amounts, terms and fees. A payday loan is a loan that you get from a business that is not a bank, usually a loan store. It is called a payday loan, because you generally borrow just enough to get through to your next payday, upon which the money is due.