In this article you will get information about common questions being raised by payday loan borrowers to lenders. The common questions such as “What is a payday loan?”, “What are short term loans?”, “What is interest rate?”, “How soon to pay?”, “Does it require payroll information?”, “Do lenders check you credit history?”, and same day bank transfer possible etc. Borrowers are also asking questions such as “Is it risky loan, spiraling into high interest loan?” etc.
1. What is a Payday Loan
This loan is an unsecured loan given to borrower till he or she receives next paycheck. In other words loan is given against the guaranty of next paycheck. Typically the need of this loan comes as emergency need on part of borrower such as car repair, medical emergency or unexpected bills etc. These loans existed earlier also and were called as private loans. These loans came with higher interest rate. The reason for higher interest rate was readily available and with less documentation. Same loan features are provided under payday loan term. The difference is loan is given against next paycheck. The length of loan is 2-3 weeks.