What Is a Payday Loan?
A payday loan is a type of short-term borrowing where a lender will extend high interest credit based on a borrower’s income and credit profile. A payday loan’s principal is typically a portion of a borrower’s next paycheck. These loans charge high-interest rates for short-term immediate credit. These loans are also called cash advance loans or check advance loans.

KEY TAKEAWAYS
- Payday loans are short-term, often very high-interest loans available to consumers.
- Payday loans are typically based on how much a borrower earns; a borrower usually has to provide a paystub when applying for the loan.
- A number of laws have been put in place over the years to regulate the high fees and interest rates.


Understanding Payday Loans

Payday loans charge borrowers high levels of interest and do not require any collateral, making them a type of unsecured personal loan. These loans may be considered predatory loans as they have a reputation for extremely high interest and hidden provisions that charge borrowers added fees. If you're considering a payday loan, you may want to first take a look at safer personal loan alternatives.

Obtaining a Payday Loan
Payday loan providers are typically small credit merchants with physical locations that allow onsite credit applications and approval. Some payday loan services may also be available through online lenders.

To complete a payday loan application, a borrower must provide paystubs from their employer showing their current levels of income. Payday lenders often base their loan principal on a percentage of the borrower’s predicted short-term income. Many also use a borrower’s wages as collateral. Other factors influencing the loan terms include a borrower’s credit score and credit history, which is obtained from a hard credit pull at the time of application.


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Minimum and maximum period for repayment from 65 days to 2 years.

Annual Percentage Rate (APR) represents the annualized interest rate that you are charged for borrowing. It is the combination of the nominal interest rate and some additional costs such as fees involved in obtaining a loan. Our lenders offer APRs for personal loans & payday loans from 4.99% to 35.00% for users with height credit score. Since our App is not involved in the lending process, we cannot deliver any specifics about the APR you will be offered. The APR depends solely on your lender’s decision, based on various factors including your credit score, credit history, income, and some other information you supply in your request. For more information regarding the APR contact your lender.

A representative example of the total cost of the loan, including all applicable fees: If you borrow $2,500 over a term of 1 year with an APR of 10% and a fee of 3%, you will pay $219,79 each month. The total amount payable will be of $2,637, with total interest of $137,48.
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