Payday Lending
A payday loan is a small, short-term loan that a borrower intends to repay on his or her next payday. This type of loan may also be called a cash advance or a payday advance loan.
Low-income people often turn to this type of loan if they need money quickly for unplanned expenses such as car repairs, prescriptions, or higher-than-usual utility bills. It's fairly easy to get a short-term loan, but you may end up paying fees and interest that add up to an annual percentage rate of more than 400 percent. In contrast, the average rate for credit cards in the United States is less than 15 percent.
Payday lending is currently legal in 37 states.
Information for Consumers
Facts on Payday Loans
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