PAYDAY LOAN
A
payday loan (also called a paycheck advance or payday advance) is a small,
short-term loan that is intended to cover a borrower's expenses until his
or her next payday. Typical loans are between $100 and $500, on a two-week
term and have interest rates in the range of 390 percent to 780 percent (APR)
. 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.Lenders say these loans are often the only option available
to consumers with bad credit or who cannot get a bank loan, credit card, or
other lower-interest alternatives.
Online payday loans are
marketed through e-mail, online search, paid ads, and referrals. Typically,
a consumer fills out an online application form or faxes a completed application
that requests personal information, bank account numbers, Social Security
number and employer information. Borrowers fax copies of a check, a recent
bank statement, and signed paperwork. The loan is direct deposited into the
consumer's checking account and loan payment or the finance charge is electronically
withdrawn on the borrower's next payday.(1)
source (1) wikipedia