What's The Definition Of A Payday Loan? What Is It Exactly?
There are plenty of loan options out there, and payday loans are commonly in question. While you may have heard of this type of loan, not many people understand what exactly this type of loan means.
A payday loan refers to a short loan term that is usually due on your next payday. The loan amount depends on how much money is expected, and you can find these loans through both storefront and online lenders.
Keep reading as we explore this type of loan, how it is used, and how you can benefit from this type of loan. We’ll also highlight the process we use for payday loans and what you can expect from us.
The Definition Of A Payday Loan
While the definition of a payday loan changes depending on your lender, most share the same characteristics. In essence, it is a short-term loan that can fill in the gap between paychecks and is often due for repayment by the borrower's next paycheck.
Expect these loans to:
- Cover a short period (depending on when you get paid next)
- Offer a small amount (usually less than $500, but this depends on your next payday)
- Have instantly available funds
These details differ depending on your lender and your condition, but a payday loan offered to you will probably look similar. You should expect to repay the loan in a single payment the next time you get paid.
Some places allow you to roll over or renew your loan, only paying its fees, but this differs depending on your location and your specific condition.
How Long Do Payday Loans Last?
Most payday loans are due for repayment within 2 to 4 weeks. This depends more on your payment schedule than it does on the type of loan.
Those with weekly or biweekly paychecks can expect a due date closer to 2 weeks. This offers them enough time to get the funds deposited for repayment without the loan wiping them out.
Others may get paid monthly, or they may be waiting for a pension payment or Social Security that comes on the first of the month. The idea is that it will carry you over to your next paycheck.
Uses For Payday Loans
There are plenty of uses for payday loans, but they’re most commonly used for emergency expenses. They work well to cover smaller medical, dental, or vet bills, and they help with repairs to your home or car.
Payday loans may be your only option for paying your bills on time, especially if your next paycheck comes a few days too late. This can help you avoid late fees and keep you in good standing with any company you’re making payments to.
Benefits Of Payday Loans
It's easy to find a payday loan lender, and they’re more accessible than other options. You can find payday loans at both in-house and online lenders, and a quick search for “payday loans in your area” will likely result in several options.
While you should have proof of income to qualify you for this type of loan, most credit types can benefit from this type of loan. Your terms and conditions don’t depend much on this information.
Payday loans are unsecured, so you aren’t offering up anything of yours as collateral. You can hold onto your property, and you don’t run a risk of losing these items if something unfortunate happens during your repayment period.
Variables Of Payday Loans
While the definition of a payday loan involves a strict framework, several details vary depending on where you get your loan, your financial situation, and what accommodations your lender can offer you.
These often include:
- Your loan amount
- When your loan matures
- Any possibility of a payment schedule
For example, most payday loans are expected to be due back in one payment, but some places can set up payment options (in line with any state regulations in place) to make repayment more possible for you.
Make sure you understand the terms and conditions of your loan completely before agreeing to it. Because there are so many variables, it’s important you do not assume anything based on the generic definition of a payday loan. This can leave you in a tricky position.
The Lending Process At Mississippi Title Loans, Inc.
Mississippi Title Loans, Inc. offers payday loans from $100 to $400, and you can finish your application process in just a half hour. Those 18 and older can get started with:
- A government-issued photo ID (such as a driver’s license)
- Your most recent pay stub
- A blank check from an active account in your name
Start with our online form and then wait for a call from a representative. They’ll answer any questions you may have and direct you to the nearest location so we can verify your information and documentation.
If you’re approved, your cash should be available within 24 hours. Our definition of a payday loan makes room for fast funding.
Get Started Today
Just as the definition of a payday loan appears short and to the point, the process is often short and painless. If you are needing some extra change to handle an impromptu expense, spare no time in getting your payday loan.
Fill out our quick and simple form in minutes and start moving forward today!
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.