What Is A Payday Loan And What Should You Know About It?

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What Is A Payday Loan? 

A payday loan, as the name implies, is the loan that you pay back on your payday. It is a loan with a very short duration. It can go up to a maximum of one year and minimum 2 days. The amount can not exceed two thousand dollars and the minimum is 100 dollars.

A payday loan provider provides this load for a short span of time i.e you have to pay back this loan as soon as you receive your salary or payment. 

Is It Interest-Free? 

No, a payday loan is not interest-free. Make sure that everything about the agreement is clear to you before you take the loan. If you are not clear about the interest rate then it’s better to ask the provider or you can also give their product disclosure statement a thorough read. 

How Is A Payday Loan Different Than The Other Types Of Loans? 

Since the time period for other loans is much higher than a payday loan, so the interest rate is different as well. Your other loans cost you an interest that is charged annually. On the other hand, a payday loan does not exceed for a period of more than 12 months, that’s why interest is charged monthly or weekly. So make sure that you have discussed this with your provider. So that you can avoid any confusion or conflicts in the future. 

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Terms Associated With A Payday Loan

There are a variety of terms that are associated with a payday loan. Those terms depend on when you will be able to pay your loan provider back. You can tell the provider when you will be expecting some money and then you can decide the terms accordingly. Mostly payday loans go for two days. But you can increase the time period to up to 2 weeks or months. 

When Can You Get A Payday Loan? 

This is the most attractive feature of a payday loan that you can get it in just one hour. The maximum time a payday loan provider can take is one day that’s all. 

Bad Credit And A Payday Loan 

If you have bad credit,  you can still get a payday loan. it just depends on when is your next source of income going to deliver that’s all. 

Can You Get Scammed? 

Unfortunately yes, you have to be very careful before taking a payday loan. Some providers have hidden terms and conditions in their agreement, that can cause you trouble later. So, take care of that. It is up to you to get all the details settled on the same day, so you can avoid any future problems. 

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Where To Go To Find A Good Lender? 

Usually, you can find them online. There are various websites that are providing payday loans with minimum interest. Take a look at their website properly, read some reviews, ask around and after making sure everything is transparent, go for a loan. 

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