Payday Loans:Frequently Asked Questions-FAQs

1. What is Payday loan ?: Payday loan is a credit advance given to a borrower,which he/she is expected to repay during his or her next pay check
 2.Who gives Payday loans?: It is always given as a lending service by various private financial organizations who specialize in granting loans and other kinds of small credit facilities to people on short term
3.Are such organizations approved or recognized by the government?: Yes !.Payday loan is,one among the various services or products offered by the financial market.And there is a financial regulatory body or bodies in every country including yours.In the USA,Payday loans and other related short-term credits are being regulated by the Consumer Financial Protection Bureau(CFPB),and it's in accordance to the Dodd-Frank Wall Street Reform and the Consumer Protection Act.But,14 states don't permit or allow Payday loans in their domains.While in the United Kingdom,Payday loans and other short-term financing are regulated by The Office of Fair Trading(OFT).In Australia,short-term loans,payroll loans and related services are controlled by the Uniform Consumer Credit Code(UCCC).Canada has no central regulatory body for this business.Nothwithstanding,Payday loan businesses also thrive there.The government of Canada permits the different provinces to control and regulate Payday loans and credits in their own districts or provinces.For instance,the British Columbia and Saskatchewan of Canada regulate their short-term credits and loans through the Business Practices and Consumer Protection Authority(BPCPA).
 4.What is APR ?: APR simply means,Annual Percentage Rate.That's the interest rate charged on the borrowed money.
5.How is the APR ?: In the US,it's between 10% to 36%.
6.Aside government regulatory bodies,is there any other way a prospective borrower can prove or examine the authenticity of a lending service provider? .Yes!.Almost all businesses form their trade organizations or associations.So,you can verify a service provider by finding out whether he belongs to a government-registered trade association in that regard.For example, Payday loan providers in US has an umbrella known as Community Financial Services Association(CFSA).In the UK we,have the Community Financial Association(CFA),and Canada has the Canadian Payday Loan Association(CPL A).Other countries where such businesses exist,there must be a trade association.So,check if your prospective lender belongs. 7.Where and when did Payday loans?: No one can say when actually Payday loan began.This business is as old as money exchange itself.Though it became known in the USA when the Senate in 1959 passed the bill according to which people were permitted to receive small sums of money as short-term loans.Then,it was called Check-Cashing-Loans.To be precise,it became a thriving and popular business when, in July 1996,the senate legalized them.With the advent of the Internet,people now can apply and borrow online.
8.What other names is  it called ?:  It is also called:Payroll Loan,Cash Advance Loan,Small Dollar Loan,and even Salary Loan,etc.
9.FundDesk did not mention my country: Actually it began in the USA,but it has moved to the UK,Canada,Australia and other parts of the world,including Asia and African countries.In Nigeria,it is called "Salary Advance".Commercial banks under,retail banking services offer salary advance to employees of reputable organizations.It might be called a different name in your own country.
10.I am self-employed,can I access Payday loan ?: Not for sure!.Most Payday lending providers do give only to employees of registered organizations and those in the public service,pending when they will receive their next pay check(cheque).
11.What is the loan duration?: Cash Advance Loans last 14-35 days.
12.What if a borrower failed to repay within the stipulated period?: Most lenders can allow what they called "differed payment".But you must pay the interest rate as stipulated on the loan agreement.Some can allow such differement,but it must not exceed the next pay check.But that will mean double APR(interest).