What is a payday loan? | Consumer Financial Protection Bureau
If approved, you get cash or a deposit, often the same day . PAYDAY LOAN
Payday lenders often charge a flat fee of borrowed. While this sounds like a "15% interest rate," the short term makes the Annual Percentage Rate (APR) astronomical. Payday Loan Credit Card Personal Loan Typical APR ~400% 12% – 30% 7% – 36% Repayment Lump sum (2 weeks) Monthly (variable) Monthly (installments) ⚠️ Key Risks What is a payday loan
A payday loan is a short-term, high-interest borrowing option designed to bridge a financial gap until your next paycheck. While they offer "fast cash" without a credit check, they are often criticized as predatory due to their extreme costs. ⚡ How it Works While this sounds like a "15% interest rate,"
You provide ID, proof of income, and an active bank account.
You write a post-dated check for the full loan plus fees, or authorize an electronic debit (ACH).
On your next payday (usually 2–4 weeks later), the lender cashes the check or pulls funds from your account. The Real Cost (APR)