Payday loans are typically secured with either a post-dated check from the borrower, or by giving the lender access to the borrowers bank account. As soon as a borrower gets paid at work, the lender is first in line to get paid on a loan that often comes with triple-digit interest. They time the payment when youre most flush, says Montezemolo.
Theoretically, payday default rates should be pretty low. However, thats not what the center found. The report analyzed bofa cash withdrawal limit borrowers in North Dakota who took out their first payday loans in 2011.
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