Loans are an important instrument of financial support. Ideally everyone would like to pay upfront, but our various financial needs at times require us to take loans. A payday loan or cash advance is a short-term ladvance of a small amount, without a credit check and that is intended to provide for the borrower's cashflow gap between pay days. The loan is generally given in cash and secured by the borrower's post dated check that includes the original loan principal amount and accrued interest. The maturity date for the cash advance usually coincides with the borrower's next payday.
It can be explained with an example: A borrower seeking a cash advance may write a postdated check for £55 to borrow £50 for up to thirty days. At the time of maturity, the borrower may opt to redeem the check by paying £55 in cash, or "roll-over" the check by paying a fee to extend the loan for another thirty days. If the borrower opts not to refinance the loan, the lender deposits the check. In this example, the cost of the initial loan is £5 as interest charge.
Payday loan being a short-term loan, the effective interest rate is usually high. The high interest rate is a cause of great controversy. It is always advisable to borrow responsibly, and understand the time value of money, as well as the effective interest rate before entering a transaction so as to avoid default.
In this section of 01webdirectory we provide a list of lenders offering Payday loans at low rates, and other resources related to loans and Payday loans.