Definition
A short-term, high-interest loan designed to cover expenses until your next paycheck. Use with caution due to high costs.
What to consider
- Reserve these for genuine emergencies only.
- Be aware of the very high interest rates and fees.
- Explore alternative options before taking one out.
Real world scenarios
- In an emergency, Marcus considers a payday loan but is wary of high fees. He shops around for more affordable alternatives first.
- Lana uses a payday loan for unexpected medical bills. Realizing the steep interest, she repays it quickly to avoid a debt cycle.
- Public resources help Angela explore budget strategies to steer clear of payday loans, focusing on building a small emergency cushion.
Related terms
Related Playbooks
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