Payday Loans

A payday loan is just what the name implies. It is usually a loan up to $1,500, that is due on your next payday. Many Payday lenders require that you pay the entire amount, plus the fee – they don’t call that as interest – back on your next payday. This could create problems, because the money is deposited directly to your bank by electronic funds transfer, and the repayment is automatically withdrawn the same way.

In fact, most lenders require that you have your paycheck direct deposited.

Here are some more information you should know before you seek such a loan. The ‘fee’ for a Payday loan averages about $15 per $100 per two weeks. This is equivalent to an annual interest rate of 396%. Also, these loans are not available in all states. They have been banned completely in Georgia and North Carolina, and are heavily regulated in New Mexico so that if you can’t pay the loan back on your next payday, they must give you 130 days to do so. In Washington D.C., Payday lenders have withdrawn from the District due to regulations that limited interest to 24 percent.

That should tell you these are predatory lenders and you should not take their bait no matter how desperate your situation. They will only make it worse.