Payday Loan
A payday loan is a loan given to you, usually by your bank, to tide you over until your next payday. If you find yourself short of money with a while to go into payday, then you have the option of arranging a payday loan. There is one thing you must be aware aware before you do this, however. A payday loan, just like any other short term loan, would offer very little incentive for the bank to offer it, if it was loaned at standard rates. The lender therefore has to increase the interest rates of the payday loan to a rather disproportionate level in order to make it worth their while.
The other thing to note is that to be eligible for a payday loan, you will generally have to fit a particular profile judged by salary, length of employment, and other similar factors.
Finally you will almost always have to repay the loan on payday (hence the name) and even if the loan agreement doesn’t stipulate this requirement and lets you carry it over, the interest rates you are charged make this an undesirable option.
|