Payday loans are loans that are given for a short period of time with the guarantee that they will be repaid in the form of income from the next salary or source of income. Such loans have very high interest rates and are called by different names such as payday advance, payroll loan, salary loan, small dollar loan or cash advance loan. A payday loan can be given to anyone regardless of their credibility. In case of giving this type of loan the bank does not look at the creditworthiness of the borrower as it is given only for 15-20 days and it is not long term. However, the borrower should keep in mind that taking a payday loan will not enhance his credibility in the market. Still, he/she must have a stable income, permanent bank account and at least 6 months of work experience to avail this loan.
Online payday loans are becoming more and more popular these days. The best thing about online payday loans is its simple application process. The application takes less than 5 minutes to complete and the portal is usually open 24 hours a day. The borrower can simply file the application for the loan online and the funds are transferred to the borrower’s account by direct deposit. In such a case the loan repayment is withdrawn electronically directly from the borrower’s account when he gets his next salary or a post dated check matures. Here is a list of Direct Payday Lenders:
- cash check: They can do this by providing online loans or through the U.S. submit your approval application within 5 minutes at their offices
- CashAdvance.com: They do not provide an online payday loan once the customer has a valid account and verify any prepaid or savings accounts.
- Cash Central: It is one of the oldest payday lenders in the country with a 24*7 online application portal.
- Mypaydayloan: It also provides approval response to the customer within 4 minutes of filled application form. It is the largest of its kind in the country.
- Blue Trust Loan: It gives loans between $300 to $1250 in almost every state. With a repayment time of around 6 months.., there is no penalty for repayment in these loans.
- Moneylion: They provide loans to almost every state in the country with different rates and terms in each state. It has loan programs available to consumers at all ends of the credit score spectrum.
- Net Credit: It provides a quick approval decision without any borrowing limit for first timers. Applicants are eligible for loans from $1000 to $10000.
- MaxLand: They have many different loans and terms and credit worthiness is not a criteria that is considered. It offers personal loans up to $1300.
There are some jurisdictions that limit the amount of interest that can be charged on loans, including payday loans. Depending on the method used, the annual percentage rate (APR) of each loan can be different. In the United States, for example, the Uniform Small Loan Laws (USLL) set APRs between 36% and 40%. The major advantage is that this type of loan provides major benefits to the industry, increases welfare for households as people who do not require short term loans can easily get long term loans and this is a service they provide. Performs what is not available in the market as per the requirement. The loan portion is usually taken by people who have exhausted all their other options of buying short term loans. These types of loans are also criticized by some on the grounds that they drain money from low-income group communities by charging exorbitant interest rates. Furthermore, in some countries, the collection practices of lenders are extremely aggressive unlike countries like the US where there is a standard collection practice set by law.