Payday advances are short-term, reasonably small-dollar loans which are marketed as a solution that is quick

MUSICAL: The Atomica Project, “Nuevo” (from Non Affair)

the payday loan provider wants evidence you have task — some pay stubs, for example. Additionally, you need a bank-account.

BOB DeYOUNG: And that is just about the level from it.

Bob DeYoung is just a finance teacher in the University of Kansas.

DeYOUNG: The payday loan provider does not gather virtually any information. The payday debtor then writes a check — and also this could be the key an element of the technology — the payday debtor then writes a look for the quantity of the mortgage and postdates it by a couple of weeks. And also this becomes the security for the loan. Therefore should the payday borrower maybe not pay the mortgage down in 2 months, the payday loan provider then deposits the check.

Therefore, the payday enterprize model is nothing like a pawn store, where you surrender your valuable belongings to improve money. To have a loan that is payday you’ll want a task and a bank-account.