In some neighborhoods, payday loans are advertised in store windows, while the internet has a growing number of online payday loan sites. Consumers in need do not have to look far to obtain cash in a financial crunch.
What is a Payday Loan
A payday loan is a small loan for which the borrower uses the money to 'hold him over' until he receives his next paycheck. Upon receiving the paycheck, the payday loan is repaid. In addition to paying the principal amount borrowed, the borrower must pay the any fees and/or interest incurred. In other words, the borrower takes a cash advance on his next paycheck. As such, these types of loans are also referred to as cash advance loans.
Payday loans are usually repaid in short order as borrowers usually receive weekly or bi-weekly. Therefore there is no long tail of outstanding debt.
