Payday Loan

A payday loan is a little, short-term loan that is planned to wrap a borrower's fixed cost in anticipation of his or her next payday. The loans are also from time to time referred to as cash advances, though that term can also pass on to cash provided against a agreed line of credit such as a credit card (see cash advance). Legislation regarding payday loans varies widely among unlike countries and, within the USA, between different states.

How payday loan Work?

Have you ever been burdened with an unforeseen outflow, like a big car refurbish bill? How have you handled it? Do you use your credit card and shell out for it, including interest, over a period of time? But maybe you don’t have a credit card. Or maybe you’re one of the millions of people who carry too much debt, and have already “maxed out” your credit card. Do you have friends to borrow from? Most of us don’t like to do that – and most friends don’t like that, either. So what do you do? Well, you could get a payday loan.

Have you ever been burdened with an unexpected expense, like a big car repair bill? How have you handled it? Do you use your credit card and pay for it, including interest, over a period of time? But perhaps you don’t have a credit card. Or maybe you’re one of the millions of people who carry too much debt, and have already “maxed out” your credit card. Do you have friends to borrow from? Most of us don’t like to do that – and most friends don’t like that, either. So what do you do? Well, you could get a payday loan.


There are both pros as well as cons to payday loan. These loans are at a high rate of interest and are being marketed aggressively through radio, television, direct mailing, and the World Wide Web.
The plus points are:

• If you suddenly need cash for medical expenses or unforeseen emergencies, a payday loan is the fastest and easiest.

• In a financial crunch, a payday loan can help you pay immediately pending bills so that your credit report remains unblemished.

• The paper work is simple and all they require is you name, address, and bank account information. The procedure for obtaining a payday loan is simple.

The disadvantages are:

• You can avail only small amounts. There are limits, some states permit as much as USD 1000 while in others the maximal permissible is USD 300-400.

• If you do not pay exactly in 14 days and need to take an extension then you may land up paying USD 60 for a loan of USD 100. Payday loans are not recommended if you need a large loan or are unable to pay the amount back quickly.

• Although payday loans enable you to access money quickly, in fact, the rate of interest charged is quite high. In fact, long term credit rates are more affordable.

• Often, the terms and conditions may not be clear and you may land up paying finance charges twice or thrice especially if you allow the amounts to be deducted from your salary itself. You must specify that you want the whole amount of the payday loan deducted not just 25% or so.


There are both pros as well as cons to payday loan. These loans are at a high rate of interest and are being marketed aggressively through radio, television, direct mailing, and the World Wide Web.
The plus points are:

• If you suddenly need cash for medical expenses or unforeseen emergencies, a payday loan is the fastest and easiest.

• In a financial crunch, a payday loan can help you pay immediately pending bills so that your credit report remains unblemished.

• The paper work is simple and all they require is you name, address, and bank account information. The procedure for obtaining a payday loan is simple.

The disadvantages are:

• You can avail only small amounts. There are limits, some states permit as much as USD 1000 while in others the maximal permissible is USD 300-400.

• If you do not pay exactly in 14 days and need to take an extension then you may land up paying USD 60 for a loan of USD 100. Payday loans are not recommended if you need a large loan or are unable to pay the amount back quickly.

• Although payday loans enable you to access money quickly, in fact, the rate of interest charged is quite high. In fact, long term credit rates are more affordable.

• Often, the terms and conditions may not be clear and you may land up paying finance charges twice or thrice especially if you allow the amounts to be deducted from your salary itself. You must specify that you want the whole amount of the payday loan deducted not just 25% or so.


There are both pros as well as cons to payday loans. These loans are at a high rate of interest and are being marketed aggressively through radio, television, direct mailing, and the World Wide Web.
The plus points are:

• If you suddenly need cash for medical expenses or unforeseen emergencies, a payday loan is the fastest and easiest.

• In a financial crunch, a payday loan can help you pay immediately pending bills so that your credit report remains unblemished.

• The paper work is simple and all they require is you name, address, and bank account information. The procedure for obtaining a payday loan is simple.

The disadvantages are:

• You can avail only small amounts. There are limits, some states permit as much as USD 1000 while in others the maximal permissible is USD 300-400.

• If you do not pay exactly in 14 days and need to take an extension then you may land up paying USD 60 for a loan of USD 100. Payday loans are not recommended if you need a large loan or are unable to pay the amount back quickly.

• Although payday loans enable you to access money quickly, in fact, the rate of interest charged is quite high. In fact, long term credit rates are more affordable.

• Often, the terms and conditions may not be clear and you may land up paying finance charges twice or thrice especially if you allow the amounts to be deducted from your salary itself. You must specify that you want the whole amount of the payday loan deducted not just 25% or so.