When Does A Payday Loan Typically Mature?

Payday loans are actually short-term loans. These are typically taken when one has an emergency situation. Imagine you are in a tight spot, such as if one of your family members needs to be hospitalized and you are still waiting for the next paycheck.

Quite a problem, right? Well, getting a paycheck loan mitigates this problem. The disbursal and documentation process is faster in comparison to other personal loans.

However, the biggest downside to payday loans is that these come with very high interest rates. So, before you sign up for one, do be sure that you understand all the risks and costs involved.

When does a payday loan mature?

You may be wondering when a payday loan matures. We understand that you are asking this question with other typical personal loans in mind. Well, in the case of these loans, the maturity date is one of the shortest in the personal loan category.

To tell you what actually happens, let’s give you a little example. Let’s say that you need Rs. 50000 urgently. You get a payday loan and promise to repay as soon as you get your next paycheck or salary. When you do get that next month or so, you repay the loan, with interest.

But as said above, the interest here can be quite high. Make sure you can repay the loan. It is very easy to fall into a debt trap in which you keep on paying the interest without being able to see the end of the loan.

How much do payday loans give you?

This depends on the lender, but don’t count on getting a lot of money. How much money you get depends on your salary. If your salary is high, you may get high loan amounts, otherwise not.

Check with the lender how much they are able to give. If your situation is dire, ask them for a custom service, but know that the interest rate can be even higher because of it. You repay it as soon as you get the next paycheck. There are lenders who have loan terms of just a couple of weeks.

These are unsecured loans. The interest is quite high and if you cannot repay it at the due date, you can roll it over sometimes to extend the term. This means that you won’t have to repay it there and then, but you’ll have to keep repaying the fees. As you can understand, this is quite risky for the borrower as well. It all depends on your capacity to repay.

How expensive are they?

These loans are significantly more expensive than other personal loans. If you do feel that payday loans are too risky for you, think about other personal loan options like gold loans. Payday loans typically come with a very high APR, sometimes as much as 500%. 

The good side of payday loans

One of the biggest benefits of payday loans is that you don’t need to show a credit score to get it. You don’t even need a credit history, bringing this loan type into the hands of most people, especially those facing emergency situations and financial difficulties.