What Is a Payday Loan

The term payday loans does not have a precise definition, but it can generally be described as a form of high-cost, short-term loan, usually for less than $500, which is usually due on your next payday, even if there is no exact definition of the term. In some states, payday loans can be obtained through a local or an online merchant lender, depending on your state’s laws regarding payday loans.

Here are some of the most common features of a payday loan that you may want to know about:

• Payday loans are usually for small amounts, and it is important to keep in mind that many states have put a limit on the amount of payday loans that can be taken out at a time. It is common to lend up to $500 per loan, although there are limits that vary from lender to lender, so you may be able to borrow more or less, depending on the lender.
• Usually, payday loans are repaid in one lump sum at the end of the borrower’s next payday, or when he or she receives income from a different source, such as a pension check or Social Security check, on the borrower’s next payday. Most loans will have to be repaid within two to four weeks from the date they were taken out. In most cases, this will be the case. In the payday loan agreement, the exact date on which the loan is due is specified.
• You will usually have to write a postdated check for the entire amount, including fees, if you intend to repay the loan, or you will have to authorize the lender to electronically withdraw the funds from your bank account, credit union account, or prepaid card account if you intend to repay the loan electronically. The lender may cash your check or electronically withdraw the money from your account if you fail to pay the loan on or before the due date if you fail to pay on time.
• Whenever you are considering taking out a payday loan, you need to be aware that lenders who offer payday loans do not take into account your ability to repay the loan as you try to meet your other financial obligations at the same time.
• There are several ways that you can receive the loan funds, most commonly in the form of a check or cash payment, or you can have them deposited into your bank account electronically, or you can have them loaded onto a prepaid debit card.

It is possible that other loan features may vary from one lender to another based on the type of loan. As an example of this, payday loans are typically structured to be repaid in a lump sum at the end of the loan term in the form of a check. According to some state laws, lenders are allowed to “roll over” or “extension” a loan when it’s due, so that the consumer only has to pay a fee on the loan and the lender extends the loan’s due date at the same time. When payday loans are structured to allow for installments to be paid off over a longer period of time, there are some instances in which they are able to be paid off in installments over a longer period of time.

The cost of a payday loan

A number of states have passed laws that limit the amount that can be charged for payday loans, usually between $10 and $30 per $100 borrowed, according to the laws that govern payday loans in their respective states. According to a recent study, a two-week payday loan with a fee of $15 per $100 has an average APR of 400 percent. In the case of a fee of $15 per $100, the APR of the loan would be close to 400 percent if the fee is $15 per $100. It is also important to note that the APR of credit cards, on the other hand, can vary from about 12 percent to about 30 percent, depending on the particular credit card. In many of the states that allow payday loans, it is important to keep in mind that the costs and fees of these loans, as well as the maximum amount of credit that can be borrowed, are capped at a specific amount in order for these loans to be legal.

The laws in your state may authorize, regulate or prohibit these loans

Payday loans are not allowed in some states, either because they are not allowed by state laws, or because lenders decided that they would not be able to operate in those states due to the high interest rates and fees that are allowed there. The state’s regulator or attorney may be able to provide you with more information if you live in a state that allows or regulates payday loans in your state.

Protections for military personnel

Active-duty military personnel, as well as their dependents, are provided with special protections through the Military Lending Act (MLA) of the federal government. A key component of these protections is the prohibition on lenders charging interest rates greater than the 36 percent cap on the military annual percentage rate (MAPR) and there are other limitations on how high interest rates can be charged on payday loans and other consumer loans, as part of these protections. Please feel free to contact the office of the Military Advocate General (JAG) if you would like more information regarding the loan restrictions. With the help of the JAG legal aid office locator, it is possible to find a legal aid office near you that offers legal aid.