A payday loan is a short-term cash loan that is based on the personal check of the borrower held for electronic access to his bank account or future deposit. Borrowers give a personal check for the borrowed amount including the finance charges. Lenders hold the borrower’s check till the next payday when this loan should be paid in a single lump sum. For loan repayment, borrowers may redeem this check, allow this check to be deposited into a bank, or roll over the loan amount for another period. Some payday lenders provide long-term installment and request authorization from the borrower to withdraw multiple payments electronically.
Payday loans in Minneapolis are quick term solutions for people who are going through a financial crisis. Consumers’ fill-in a registration form at lending offices. The only documents required are bank account number, identification proof, and recent pay stub. Loan amounts vary greatly depending on your state laws. If your loan amount gets approved, you receive cash instantly. The loan amount is due on the borrower’s payday that is almost two weeks. Borrowers usually post-date a check or give electronic access to the lender as mentioned earlier. Payday lenders charge APR (Annual percentage rate) that ranges between 391%-521%.
Requirements for payday loans
The consumers who want to avail payday loans require a bank account, a steady income source, and identification proof. Generally, lenders do not conduct a credit check or ask questions to a borrower to decide whether he can repay the loan. Some loans are offered dependent on the lender’s ability to collect the amount and not only on the borrower’s ability to repay. It has been found that almost 80 percent of payday loan borrowers have either rolled over or borrowed amount. The default rate is one out of 5 borrowers. Moreover, almost half of the payday loan installments default in payment.
Non-payment of payday loans
If you can’t repay the payday loans within the deadline, then you may request the lenders of payday loans in Minneapolis to roll over this loan amount. On rollover, you have to pay the actual loan amount and finance charge including the additional finance charges. The interest or finance charges are between 15% and 20%, and it depends on the lender, and at times, it can be higher too. State laws regulate interest rates that payday lenders can charge. The interest amount is calculated by multiplying the borrowed amount by interest charge.