Posts Tagged ‘Loans’
What are Payday Loans or Cash Advance Loans?
A payday loan (also called a paycheck advance or advances of salary) is a small short term loan that is intended to cover the borrower until their next payday. Typical loans are between $ 100 and $ 500 and are due in two weeks, with interest rates of up to 400% APR. In a two-week loan, fees average $ 15 per $ 100 of Lent. 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 as a credit card.
Legislation relating to payday loans varies widely between countries and within the U.S., between states. Some jurisdictions impose strict usury limits, limiting the APR that any lender, including payday lenders, can charge, and some outside law payday loan completely, and some have very few restrictions lenders payday.
Statistics compiled by the Center for Responsible Lending show that the majority of industry profits come from repeat borrowers who can not repay the loan on the due date and instead repeatedly renew their loans, paying fees each time. The industry of payday loans rejects these allegations.