What are Payday Loans?

What are Payday Loans?

It might happen that you need some money in an emergency and you are not able to gather the required amount. In such caseyou can take help from lenders who offer payday loans. Payday loans can be referred as the advance salary, payday advance, short term or cash advance loans.

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These are unsecured loans where borrower takes small amount of loan on a very high rate of interest. For taking the loan, a borrower has to give a post dated cheque to the lender of the loan amount plus the fee he charges for lending that money.

The lender usually cashes this cheque on the mutually agreed date which is generally the payday. As the money lenders are on the greater risk while lending these unsecured loans, they charge high rate of interest. Generally, this rate of interest is around 36-40% per annum.

There are different methods of calculating this annual percentage rate of the loan. The loan lenders usually lend loan to person who has a good credit score. Getting a payday loan is a fastest and more convenient option for getting required amount in the emergency before your next pay.

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There are many lenders who provide instant payday loans and you can ask for their help when you need urgent money. Many of the payday lenders are online, which means there is no delay in loan sanction process.

The application process is quick and easy as there is no delay in faxing or posting of documents. Some of your basic details such as your name, address, monthly salary, etc. would be required by the lender to sanction your loan.

Once your loan is approved, you will be provided with the information such as amount of loan, date of repayment, repayment amount, the rate of interest on amount via email. Along with these details, you will also receive an agreement with conditions of loan.

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Payday loans are useful if their conditions suit you and can be worst than your nightmare if you are not aware of their terms and conditions. Here is a useful reference on types payday loans which are useful.

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