Payday loan or cash advance or payday advance loan is a short term financial loans. The best part of payday loan is that you can borrow the cash advance without a credit check. With simply application submission online on website, you can get instant money transferred to your account. The approval process of the payday loan is short and consumes less time. The amount of payday loan is usually small, typically in the range of $100-$3000, and it varies from one province to another. In this guide, on different occasion different terms will is used, for example, salary loan, holiday payday advance and small-dollar loan, to describe various contexts and scenarios. Essential terms refer to payday loans only and must not be confused with secured or unsecured loans.
The loans rely on borrower previous payroll and employment records, borrowers must have at least $1000 per month steady income to be eligible for salary loans. There is strict legislation regarding the payday loans and it varies between countries. To cut down the excessive rate of interest by lenders, jurisdiction outlaw payday loans entirely in 2016 and rates of these loans were restricted by the USLL (Uniform Small Loan Laws). The annual percentage rate of loans becomes higher than expected, for example, for $100 loan for a tenor of 14-day you would have to return $115, which is straight $15. This caused substantial risk to borrowers and carried more long term risk as well. Fortunately, scenario is sometimes different now.
Traditional model known as retail model involved borrowers visiting payday loan stores and securing amount as per their requirement. The loan amount has to be repaid on the next paycheck. When tenor of loans ends, borrower repays amount and fees to payday lender. Tenor maturity date is often short and failing to repay loan amount on that that often includes additional free or increased interest rate or both. In the recent application process, borrowers have to pay a fixed rate of interest and entire transaction occurs electronically.
As per one of study by The Pew Charitable Trust – user demographics of most payday loan borrowers in US are white, female and with an age range of 25-44 years old. However with extensive research and by controlling other characteristics, user demographic for payday loan can be ordered into five groups:
Generally, use of payday loan is to cover ordinary living expenses, for example, rent and tuition fees. “Recent immigrants are more likely to borrow online payday loans” – says FDIC (U.S. Federal Deposit Insurance Corporation. As per research conducted in Illinois Department of Financial and Professional Regulation, individual’s with less than $30,000 applies for payday loan often.
The payday loan online process works differently as compared to secured or unsecured loans. As per subject matter experts – payday loans add value to borrower lifestyle and helps consumer to make smart decisions. You can use this guide to know about top five payday loan lenders in Nevada, payday loans process, and how to use your funds.