Are you in need of cash quickly and need to borrow it? If so, you'll have a couple of options to pick from. One popular option is a payday loan, which allows you to borrow the money that you need very fast. Here are the basics about them that you need to know. 

Payday Loans Are Paid Back Quickly

Payday loans are designed to give you an advance on your upcoming paycheck since they will be paid back when you receive it. Rather than having months to pay back the loan, you'll only be given a few days or a week or two. This depends on when you are expected to receive that next paycheck. You'll go to the lender and give your check directly to them. If you have a direct deposit, you may need to arrange to transfer the funds when you receive them.

Payday Loans Have High-Interest Rates

One of the things to know about payday loans is that they have high-interest rates. This is because they are a more risky loan for the lender, and, likely, people will never return to pay back the loan. While the average payday loan has an APR of 390%, it can be difficult to grasp exactly how much that will be from your paycheck. In general, expect to pay around $15 to $30 to borrow $100 from a payday loan provider. 

Payday Loans Can Be Renewed

If you are unable to pay back the payday loan when you receive your next paycheck, know that you can renew the payday loan for an additional period. You'll typically be expected to pay some sort of fee to extend the payday loan, and your interest will continue to build on the amount that you borrowed for the additional period. However, this may be the best option for your financial situation. 

Payday Loans Can Be Defaulted On

If you do not pay back the money you owe to a payday loan provider, then you will default on the loan. There are potential consequences, such as having your debt sent to a debt collection agency, hurting your credit score, and even being taken to court. You'll also have trouble receiving loans in the future because you have a history of being unable to pay back loans. That's why it is best to do what you need to do to repay the loan in full.  

For more information, contact a local company that offers payday loans