Cash loan also known as iwantpayday loan or payday advance is a unsecured, short term and small loan. It mostly relies on previous employment and payroll records of the consumer.
Legislation exists regarding cash loans and they widely vary between different countries.
Some jurisdictions have very few restrictions on cash loan lenders while others outlaw cash loan entirely. To limit high and unreasonable interest rates, other jurisdictions set a minimum annual rate that any lender can charge.
Cash loans carry a risk to the lender of default of about ten to twenty percent. Study shows default cost lenders their annual revenue more than a quarter.
Cash loan process involves the lender giving cash to the borrower with payment to be made in full at borrower’s next payday.
Cash loan is mostly borrowed to cater expenses over the months and for emergencies. Borrowed mostly by low income group of people in the society.
In many countries, collection of debts by lender is done using the standards way of collecting debts. Any lender who ignores restrictions, rules and regulations set to control cash loan transactions is fined.