The Process of Getting a Payday Loan

After you have filled out all of the necessary paperwork your payday loan is usually given to you in cash. Also the loan is usually secured by your post-dated check, and the accrued interest and the original loan principal is included. Plus your next payday typically corresponds with the maturity date. What you need to keep in mind is that if you do not repay the loan or service the loan in person, then the lender will either process the check or electronically withdraw from your bank account the loan amount on the maturity date.

To better explain the process here is an example of a payday loan. If you want a payday loan then you can write a post-dated personal check that includes both the loan amount and the interest/fee. The personal check is good for either a week, two weeks, or a month depending on when you receive your next paycheck. So say you need $100.00, you write a personal check for $115.00. This is because your loan is for $100.00 and there are $15.00 in finance charges. The payday lender agrees to not cash the check until you get paid next, which the borrower can either redeem the check by paying $115.00 in cash or refinancing (or roll-over) the check.

If you decide to roll-over your loan you would have to pay an extra $15.00 for another week, two weeks or month, until you receive your next paycheck. So now you owe $130.00. Now you need to keep in mind that several states only allow a certain number of roll-overs, or they do not allow roll-overs at all. If you do not choose to roll-over or to pay in cash then the lender will cash the check so that they can receive their money.

 

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