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Payday loan

Payday loan Definition

A payday loan or paycheck advance is a small, short-term loan (typically up to US$1,500) that is intended to bridge the borrower's cashflow gap between paydays. Payday 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.


Additional meaning of Payday loan:

Licensed payday advance businesses, which lend money at high rates of interest on the security of a postdated check, are often described as loan sharks by their critics due to high interest rates that trap debtors, stopping short of illegal lending and violent collection practices. Today’s payday loan is a close cousin of the early twentieth century salary loan, the product to which the "shark" epithet was originally applied, but they are now legalised in some states.


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