A payday loan is a short-term loan, generally for $500 or less, that is typically due on your next payday. Payday loans generally have three features:
- The loans are for small amounts.
- The loans typically come due your next payday.
- You must give lenders access to your checking account or write a check for the full balance in advance that the lender has an option of depositing when the loan comes due.
Some ways that lenders might give you the loan funds include: providing cash or a check, loading the funds onto a prepaid debit card, or electronically depositing the money into your checking account.
The cost of the loan (finance charge) may range from $10 to $30 for every $100 borrowed. A typical two-week payday loan with a $15 per $100 fee equates to an annual percentage rate (APR) of almost 400%. Yikes!
Don't fall into the Payday Trap
Don’t fall into the trap of borrowing time and again with never ending interest rates. You usually pay back double the amount you borrowed, if not more! Payday lenders usually bait you with “FAST CASH” gimmicks, but that convenience is often accompanied by outlandish high interest rates and fees. Borrowers who cannot repay their loan within two weeks are often forced to roll over the loan, and can get trapped in the cycle of borrowing over and over! Contact us and see how we can help.
Foothill Credit Union is a full-service credit union with California branches in Arcadia, Covina and Glendora.