Payday loans are loans meant for the people who wish to meet up their expenses by the next payday. The borrowers intend to cover up the loan amount by the given time. In most of the cases the time allotted to repay the loan is 2 weeks. Although Payday loan lenders follow strict rules of issuing a Payday Loan, some on the other hand have less restriction.
Borrowers can either go for the retail Payday Loan lending process or the Internet Payday Loan lending process. In retail lending process the borrower needs to go to any of the payday lending store, submit the necessary documents like the income proof, the bank statements etc. The payday loan lender gives a check or processes the amount. The borrower needs to return to the store in the given time to return the loan amount with the fees. If not, then the lender would process a postdated check provided to him by the borrower at the time of issuing the loan.
The Internet Payday Loan lending process involves online form submission by the borrower and the lender after reviewing the borrower's documents transfers the fund to his checking account. After the given date the lender electronically debits the amount from the borrower's bank.
Borrowers take the loan from the lenders on a short-term basis. Borrowers have to repay the loan amount along with the fees applicable. This fee is the interest amount on the loan, may vary from 15%-30%.
Payday Loans though being an easier way to avail loans by the borrowers, it involves high risk. The short-term period to repay the loan sometimes becomes a hassle for the borrowers. Though being an easier way to avail loans, sometimes the borrower is not concerned of the Interest they are supposed to pay over the loan amount and is only concerned about the loan amount.
Governing bodies across various states keep a look that the borrower gets the lower interest loan with a longer term, so that the borrower can gradually get out of the debt cycle of the Payday Loans. Thus the older trend of the Payday loans are now being revised to avail maximum benefit to the Payday Loan borrower.
