Payday Loan

Payday loan is a type of loan that can be availed between paychecks when the need for immediate settlement of bills arises. The practical use of payday loan can be seen when you face with medical bills or penalties which when not paid on time would cost you a lot. But in the middle of the month, getting a loan is not that easy. First you have to apply for the loan, then wait for the approval and then get it deposited in your account

But thanks to the banking sector, you need not wait like this rather you can get your money within 24 minutes of applying all at the comfort of your home irrespective of your credit status. The process of availing a payday loan is as simple as that. You just have to find an online broker or agent who would offer you an application form where you have to quote your desired payday loan amount.

 

You have to specify you salary status, employment details, and of course your place of residence. The reason behind asking about the place of residence is that payday loan is banned in 12 states and Georgia. Once you find your right quote, then you have to apply with the same online portal. The next moment, the processing of your application begins.

 

Within 24 hours you would get your desired funds deposited in your account. The most commonly availed payday loan package is the $500 which comes with an interest rate of 650% APR or Annual Percentage Rate. It is the rapidity of approval and availability of funds that has made payday loan quite popular. The payday loan repayment period is usually 14 days after which the payday loan companies take back the lent money through the ACH or Automatic Clearing House on the next paycheck.

 

But if you do not have adequate funds then they give you an option of rolling over or flipping over where you can convert your previous loan into a new one with new interest rates but quite higher than the previous one. Again if you fail to repay the amount, the amount keeps on rolling over. Sometimes the interest soars up to 1000%. It is because of this exponential increase in interest rates that has made payday loan vulnerable to criticism. Further they are also designated as financial quicksand and predatory lending.