Facts about Half Price Payday Loans
Half price payday loans are unlike any other loan. They have different requirements, terms, and interest rates from conventional loans. Here are the facts every borrower should know before taking out one of these advances.
How They Work
Half price payday loans are short-term loans that are based on electronic access to the borrower's checking or savings account. In order to receive and pay back the funds, borrowers must sign over electronic access to their bank accounts to the lender. Once this access is granted, the lender can wire the loan to the borrower's account upon approval. When the time for repayment arrives, the lender can also automatically transfer the funds for repayment from the borrower's account. Depending on your lender, borrowers may be able to get more time for repayment by rolling the loan over. This convenience usually comes with an additional finance charge (varies by lender).
Terms of the Loan
State legal maximums will affect the amount of your half price payday loan, as will the policies of your lender. Most loans range from $100-$1,000 (varies by lender). The average payday loan term is about two weeks, with a 470% APR (varies by lender). Most payday lenders reflect the APR in a finance charge. For example, it might cost you $20 in interest for every $100 you borrow (varies by lender).
Requirements for Payday Loans
Each lender will have different qualification terms, so you should always ask before you apply. At minimum, most lenders tend to require the following (varies by lender):
- At least 18 years old
- U.S. citizen
- Have a valid checking or savings account with direct deposit
- Employed or have other source of steady income
- Earn at least $1,000 per month
About the Payday Loan Industry
Half price payday loans still fall under the purview of the industry in general. Payday loans are issued by payday loan outlets, pawn shops, and check-cashing stores. Rent-to-own companies may also issue payday loans. These loans are promoted mostly over the Internet. In the U.S., there are about 25,000 payday loan outlets. The industry as a whole has a loan volume of over $28 billion, $5 billion of which represents fees paid by borrowers. Payday lending is regulated in 37 states. Such legislation usually imposes maximum interest rates and maximum loan amounts on payday lenders.
