What is a payday loan?
Payday loans, sometimes called payday advances, are short-term unsecured loans, usually small loans. The collateral that usually needs to apply for these specific loans is some form of employment record, such as a payroll, although the term payday loan has become a shorthand for any type of small short-term loan, even though it is technically not directly dependent. The borrower's support for the next salary. Like any lending tool, payday advances are strictly regulated. These regulations vary widely between states in the United States and internationally.
Payday loans are a thriving business
Payday lenders have seen a thriving success on a global scale and attribute this success to providing services that were not previously available. They point out that emergency cash loans offer an attractive option for those who are unable or unwilling to borrow money from cheaper traditional channels. In the UK, some companies offering emergency cash advances describe their approach as a convenient financial service for young borrowers who are accustomed to the Internet, and they are accustomed to the convenience of instant online communication. These applicants often feel rejected by the traditional banking system. Today, modern consumers who are fully raised by social media can even use smart phones to apply for these microloans and transfer funds to successful applicants' bank accounts within minutes.
Compare payday loans with other loan types
When the loan-related expenses are counted as annual APRs, many types of short-term loans appear to be expensive. Therefore, payday lenders tend to compare their loan products with bank overdraft fees and other fees that traditional lenders use to recover funds. Many payday lenders do not even describe their business as a bank, but another Internet technology that links voluntary borrowers to voluntary borrowers.
Payday loans available 24/7
As traditional loan outlets are finding it harder to find, even for microfinance, more and more paperwork is needed, and payday advances have been intervened to fill the vacuum. They are available day and night 7 days a week, and in many cases the process is so fully automated that the creditor does not need to talk to others. After the applicant has established a record of successfully paying off the cash advance payment loan, some lenders only require the applicant to enter the amount of the required loan and the period of the required loan, and then the money is immediately available.
Then why should I pay extra interest?
Sometimes this is an unexpected emergency, or it may be an opportunity, but you can't give up. Is it a ticket to the playoffs? Have friends got a back seat in the "Battle of the Century"? Or you made an unforgivable sin and forgot your important birthday…
For whatever reason, you are short of cash. If you don't have a credit card, your friends and family may not be able to help. What is your job?
For those who have urgent financial needs, it is increasingly common to seek “payday loans” from short-term loan companies. These loans are usually unsecured, which means that the borrower has no collateral to provide. This makes the loan a high-risk cash advance for the loan company. If the borrower is released on bail, then there is nothing valuable to collect. They compensate for the increased risk by charging very high interest rates.
Applicants usually must provide proof of employment and the government will issue an identity card. The idea is that when the applicant's next paycheck is issued, the funds will be used to repay the loan. In some cases, a loan can be provided to a borrower to purchase a car or other large item. In these cases, the risk involved in the lender is less. If the applicant fails to repay the loan as scheduled, the item may be re-occupied.
So what is the bottom line?
Companies around the world offer payday loan services, including Canada, the United States, Australia and the United Kingdom. The rules and regulations governing how much interest is charged, as well as the amount of the loan, depend on the country, state, province or county where the payday loan company is located.
The industry is growing; it may be the fastest in the UK, where there are fewer regulations for payday loan companies. British companies have expanded to Canada and Australia. In some states in the United States, ultra-high-interest loans [such as loans from payday loan advances] are illegal.
On-site check cashing is another service often provided by payday advances. Maybe the customer doesn't have a bank account or wants to use cash immediately. A fixed percentage or a percentage of the check amount will be charged. Short-term loan companies usually open and close the door early to take advantage of those who need to use cash immediately.
Many companies now offer online application for payday loans. They usually make quick decisions about the customer's application within an hour. Cash can then be deposited into a bank account or collected by the borrower at the company office.