What is a payday loan?

by issac.schaden , in category: Banking and Credit , 9 months ago

What is a payday loan?

Facebook Twitter LinkedIn Telegram Whatsapp

1 answer

by tess.kassulke , 9 months ago


A payday loan is a short-term, high-interest loan that is usually taken out by individuals who need immediate cash but cannot access traditional loans due to poor credit history, low income, or lack of collateral. These loans typically need to be repaid in full on the borrower's next payday, hence the name "payday loan." The application process for payday loans is often simple and quick, requiring minimal documentation or credit checks. However, due to their high fees and interest rates, payday loans can be very costly and can trap individuals in a cycle of debt if they are unable to repay the loan on time.