Understanding Payday Loans

A payday loan lets you borrow money for a short-term period and is usually payable on your next payday. However, these are often not for large sums of money and have hefty interest rates. The typical borrowing limit is $500, though restrictions might be higher or lower. Interest rates can be costly. The usual loan annual percentage rate (APR) is 664 percent which is more than 40 times higher than the average credit card interest rate.  Paying a payday loan is usually done in one lump sum on the borrower’s…

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