A payday loan is a type of short-term borrowing where a lender will extend high-interest credit based on your income. Its principal is typically a portion of your next paycheck. Payday loans charge high interest rates for short-term immediate credit.
Payday loans charge borrowers' high levels of interest and do not require any collateral, making them a type of unsecured personal loan. These loans may be considered predatory lending, as they have extremely high interest, don’t consider a borrower’s ability to repay, and have hidden provisions that charge borrowers added fees. As a result, they can create a debt trap for consumers.
Payday loan providers are typically small credit merchants with physical stores that allow on-site credit applications and approval.
Payday lenders charge very high levels of interest: as much as 780% in annual percentage rate with an average loan running at nearly 400%!!!!
Payday loans are short-term, very-high-interest loans available to consumers.
Payday loans are typically based on how much you earn, and you usually have to provide a pay stub when applying for one.
Stay away from payday loans and try traditional loan avenues. Payday loans should be the last resort of a last resort.