Credit portal




Payday loans how they work

payday loans how they work

Other People Are Reading

Getting the Loan

The standard term of a payday loan usually is two weeks. Say you want to borrow $100. The payday lender asks you to write a postdated check for that amount, plus a loan fee. These fees vary by lender, but $15 per $100 borrowed is common. So you write a check for $115, and the lender gives you $100 cash and holds onto your check for two weeks. Alternatively, the lender directly deposits $100 into your checking account, and you authorize the lender to deduct $115 from your account in two weeks.

Repaying the Loan

After two weeks, the lender deposits your $115 check, or directly deducts $115 from your checking account. Now the loan is settled. However, if you don't have the money in your account to repay the loan — and many people who resort to payday loans do not — then you can renew or "roll over" the loan. That means getting another two weeks to repay, for another $15 fee.

High Interest Rates

On the face of it, a $15 fee for borrowing $100 looks like 15 percent interest. But in lending, interest rates typically are expressed in annual terms. A 15 percent interest rate for two weeks equates to an annual rate of about 390 percent. That's far higher than you would pay for, say, a cash advance on a credit card or a personal loan from a bank or credit union.


Please enable JavaScript to view the comments powered by


  • Photo Credit glegorly/iStock/Getty Images

You May Also Like

A payday loan is given by a company to an individual who is able to provide evidence that they work and get.

How Does Renewing a Loan Work. Payday loans, which some states allow private lenders to offer based on borrowers' future income;.

Two types of loans are available using your debit card. The first is a debit card payday loan, and the second is.

How Does a Payday Loan Work? A payday loan is given by a company to an individual who is able to provide.

Unlike bank and payday loans, a pawnshop loan requires no credit check or application and can be obtained in just minutes.

Payday loans provide instant cash between paychecks. while others regulate them heavily, because payday lenders charge extremely high interest rates.

Money Tree payday loans offer the opportunity to borrow cash until you get your next paycheck. How Does a Payday Loan.

Loans allow people to make large purchases, while also allowing banks to make a profit through interest on the loans. Find out.

How Does Life Insurance Work. Loans; Real Estate. Buying a Home; Home Loans; Selling a Home; Careers. Career Advice; Land the.

How Do 401K Loans Work? Comments. Related Ads. Check It Out Lending Money to Your Adult Kid by You May Like.

Project Payday is a legitimate work-from-home business opportunity. In fact, it is not unusual for a newbie to make money in the.

Category: Payday loans

Similar articles: