What was previously called a payday loan (also called a payday advance, salary loan, payroll loan, short term, or cash advance loan), but now referred to as High Cost Short Term Credit, is a small, short-term unsecured loan, usually for a period of up to 4-6 weeks.
The basic loan process involves a lender providing a short-term unsecured loan to be repaid at or by the borrower's next payday. Typically, some verification of employment or income is involved (via pay-slips and/or bank statements) or through credit reference agency reports.
These are a very convenient and simple way for those who need cash due to unforeseen circumstances, (for instance an urgent car repair or a replacement refrigerator or perhaps a broken down washing machine), in the middle of the month, for those who know that they are going to pay it back when they next get paid. They are not designed for those who are not in paid employment and may not have the means to repay them on time.
Usually the application process takes just minutes. Once a loan has been approved, loan funds are usually transferred to the borrower’s bank account.