What does it mean to be on a a payday loan?
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Payday loans were designed to offer you quick cash in between paydays, for emergencies or specific requirements that couldn’t wait. If used properly, they can save you a lot of money compared to missing a rent payment, or going overdrawn or having your electric cut off, etc.
They’re intended as short-term, low value loans.
You would never get a payday loan for more than your monthly income. They’re intended to be paid off at the end of the current month – not spread over an extended period.
Payday loans are small loans issued by the financial companies. Such financial companies are the third party entitities who are authorized to grant loans aside from the banks and the credit unions. A payday loan is short in duration since it must be paid back whithin one month at the most and also payday loans are so much smaller in amount compared to the loans from banks and credit unions. Payday loans are not any different from any other type of credit so if somebody does not pay back the Payday loan then that person’s credit file will become negative just how it happens with unpaid debt from credit cards or debt from unpaid loans issued by banks or credit unions.