The adverts are on the radio, TV, the Net, even in the post. They refer to payday loans - which come at a particularly high cost.
Check cashers, finance corporations and others are making small, short-term, high-rate loans that go by a selection of names : payday loans, money advance loans, check advance loans, post-dated ch! eck loans or deferred deposit check loans. The company gives the borrower the quantity of the check minus the charge. Charges charged for payday loans are generally a proportion of the face worth of the check or a fee charged per amount borrowed - say, for each $50 or $100 loaned. We could say you write a private check for $115 to borrow $100 for at least fourteen days. At that point, depending on the particular plan, the bank deposits the check, you redeem the check by paying the $115 in money, or you roll-over the check by paying a fee to extend the loan for another 2 weeks. How will they compete against each-other? How do they compare to the present rates ( see step two above ). In addition, you do not need to be encumbered with going thru your credit score at this phase. But isn't it good to know that by that point, the bank has fundamentally, already licensed your loan?