A payday loan, paycheck advance or cash advance is a small, short-term loan (typically up to $1,500) without a credit check that is intended to bridge the borrower's cashflow gap between pay days. Note, however, that the term cash advance can also mean cash provided against a prearranged line of credit such as a credit card
For example, a borrower seeking a payday loan may write a post-dated personal check for $115
to borrow $100 for up to 14 days, the cost of the initial loan is a $15 (Total Interest and Fees), or 391.07% APR. Second eample, a borrower seeking a payday loan may write a post-dated personal check for $795.00 to borrow $700.00 for up to 14 days, the cost of the initial loan is a $95.00 finance charge (Total Interest and Fees), or 353.83% APR.
Better than bounced checks:
Payday loan makers also argue that the interest on a payday loan is less than the costs associated with bounced checks or late credit card payments. For example, bouncing a $100 check may inccur an NSF fee from the bank of $28 and a returned check fee of $25 from the merchant. Requesr free quotes