Monday, June 10, 2024

Payday loan

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Nyongesa Sande
Nyongesa Sandehttps://bizmart.africa
Nyongesa Sande is a Kenyan blogger, Pan Africanist,c olumnist Political Activist , blogger, informer & businesman who has interest in politics, governance, corporate fraud, human rights and television personality.

payday loan (also called a payday advancesalary loanpayroll loansmall dollar loanshort term, or cash advance loan) is a short-term unsecured loan, often characterized by high interest rates.

The term “payday” in payday loan refers to when a borrower writes a postdated check to the lender for the payday salary, but receives part of that payday sum in immediate cash from the lender. However, in common parlance, the concept also applies regardless of whether repayment of loans is linked to a borrower’s payday The loans are also sometimes referred to as “cash advances“, though that term can also refer to cash provided against a prearranged line of credit such as a credit card. Legislation regarding payday loans varies widely between different countries, and in federal systems, between different states or provinces.

To prevent usury (unreasonable and excessive rates of interest), some jurisdictions limit the annual percentage rate (APR) that any lender, including payday lenders, can charge. Some jurisdictions outlaw payday lending entirely, and some have very few restrictions on payday lenders.

Payday loans have been linked to higher default rates

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