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Payday loans are short term cash loans that are given to borrowers against a check or against access to borrowers account. Usually, borrowers write a personal check for the amount they intend borrowing and hand it over to the payday loan lender.This amount also includes the charges for the loan. Once this formality is done with, the borrower is advanced the payday loan. Occasionally, borrowers sign over access to their electronic accounts in order to receive and repay the payday loan. The payday loan lender holds on to the check till the borrower’s payday when the total loan amount along with charges must be repaid to the lender. A borrower can redeem the check for cash, allow it to be deposited in the lender’s bank or just pay the interest and roll the loan over to the next payday.Payday loans can range from $100 to $1,000 and have an average loan term of two weeks. The average annual interest rate on payday loans is about 470%. Lenders charge anywhere from $15 to $30 on every $100 borrowed.Payday loans can be extremely expensive when compared to other cash loans. A $300 cash advance on an average credit card which is repaid in a month’s time would cost approximately $13.99 on finance charge and an annual interest rate of almost 57%. In comparison, a payday loan finance charges on every $100 would cost $17.50, and as a result the $300 would end up costing $105 if it is renewed one time. In other words, the $300 would end up attracting 426% annual interest if taken as a payday loan.In order to obtain a payday loan, a consumer needs to have an open bank account of good credit standing, a steady source of income and proof of identification. Payday loans are usually made by payday loan stores, check cashers and pawn shops. Loans are also made by rent-to-own companies and this can be availed by a telephone or online.
Article Source: http://www.content.onlypunjab.com
About the writer: Nigel Kerry is an American free lance writer born in Los Angeles, California. Kerry writes Sportsbook reviews, sport book articles and articles with respect to Sports Betting.
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