Payday Loans Explained

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What are payday loans?

Payday Loans Explained

Payday loans are unsecured loans based on the borrower's ability to repay the loan as opposed to more complex factors. While approval for traditional loans often depends on the borrower's credit history, income, debt-to-income ratio and assets, only the borrower's income is considered during the approval process for a payday loan. If you are seeking a quick way to borrow money, you should know that payday loans only provide a limited amount of cash and must be repaid in a short period of time. Most payday lenders require the loan be repaid in full by the borrower's next payday. The exception to this requirement is when the borrower's next payday is less than seven days after the loan is approved. In these cases, the funds typically need to be repaid on the second payday after the loan is approved.

   

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