What it is
A short loan repaid from your next salary. Unlike earned wage access you can borrow more than you have already earned, and it costs more. Usually repaid in one payment on payday.
Who it suits
Salaried staff paid regularly by bank or e-wallet, with an occasional expense larger than what has been earned so far this month.
What it usually costs
You borrow $100 for 30 days. A 3% fee is $3. On payday you repay $103. If the fee were 10%, you would repay $110 for the same money. Always ask for the figure in dollars.
See what it costsWhen not to use it
- If your employer offers earned wage access. It is cheaper.
- If you cannot repay it all at once on payday. Rolling a short loan over is where fees grow.
- If you are using it to repay another loan.
Questions to ask
- 1.What is the total I repay in dollars, and on what date?
- 2.Is there a fee if I repay early?
- 3.What is the late fee, and when does it start?