Nowadays, payday loans or short-term cash loans are very useful in emergency situation. But to get a payday loan you have to meet minimum criteria. All that is generally required to get a payday loan is an open bank account with a good bank balance, a steady source of income and identification. Lenders do not check the full credit or ask questions to determine if a borrower can afford to repay the loan. However, many states have restricted the number of loans that you can have at any one time.
Whenever you think to get a payday loan, consider the terms and conditions twice. Generally, payday loans range in size from $100 to $1000, depending on the state rules. The average duration of loan term is about 14 days. Loan typically costs 400% annual interest (APR) or more. The finance charge ranges from $15 to $30 for every $100 borrowed. For two-week loans, the interest rates range from 380% to 790% APR. Shorter-term loans have even higher APRs.
Sometimes payday loans can be expensive compared to other cash loans. A $300 cash loan on a credit card, which is repaid in one month, would cost around $13.99 (finance charge) & an annual interest rate around 57%. By comparison, a payday loan for the same $300 could cost about $100 at 400% annual interest.