A payday loan is a short-term cash loan based on a borrower’s personal check that is held for future deposit or on electronic access to the borrower’s bank account. The borrower writes a personal check for the amount borrowed plus any finance charges and receives cash in return. In some cases, borrowers are required to sign over access to their bank accounts in order to receive and repay a payday loan.

The payday lender holds the borrower’s check until the borrower’s next payday when the loan and finance charge must be paid in one lump sum. To satisfy the loan, borrowers can redeem the check by paying the loan with cash, allow the check to be deposited, or they can simply pay the finance charge to roll the loan over until the next pay period. Some lenders offer longer-term installment loans and request authorization to withdraw multiple payments from the borrower’s account, typically taking place each pay day.

Payday loans can range in size from $100 up to $1000, depending on the legal maximums in your state. The average loan term is about two weeks, and typically have annual interest rates of 400% or more. Finance charges average $15 to $30 for a $100 loan, making it such that a two-week loan can result in interest rates from 390% to 780%. 

At Progressive Debt Relief, we are determined to ensure you have the tools necessary to avoid future financial distress, and we strive to help you establish a debt free life with the peace of mind that comes with financial security. If you’ve fallen victim to predatory payday loan tactics, we can help.

To find out more about our services, or to schedule a complimentary consultation, contact us today.