What is a PayDay loan?

Created by Chinwendu Nwazojie, Modified on Mon, 18 Mar 2024 at 08:15 AM by Chinwendu Nwazojie

A payday loan is a microloan given to workers who are paid through Remita or IPPIS.

It is typically due on the borrower's next payday. Payday loans are designed to provide quick access to cash for unexpected expenses and emergencies. 

These loans provide quick access to cash, allowing borrowers to address urgent financial needs promptly. However, it's important to carefully consider the terms and repayment requirements before opting for a payday loan

Key Points of a PayDay Loan?

  • Short-term Nature: Payday loans are designed to be paid in two weeks or the borrower's next pay. It is not a long-term loan.

  • Easy Application Process: The application for a payday loan is made easily accessible to borrowers with a verifiable income.

  • Automatic Repayment: Repayment is typically automated, with the due amount being directly debited from the source when the employer pays.

  • No Collateral Required: Unlike secured loans, payday loans do not require collateral. Approval is often based on the borrower's income and employment

  • Eligibility Criteria: Borrowers usually need to have a steady income, a bank account, and meet minimum requirements.

  • Purpose: Primarily used for covering urgent or unexpected expenses before the next paycheck arrives.

Was this article helpful?

That’s Great!

Thank you for your feedback

Sorry! We couldn't be helpful

Thank you for your feedback

Let us know how can we improve this article!

Select atleast one of the reasons

Feedback sent

We appreciate your effort and will try to fix the article