A payday loan (or paycheck advance) is a short term loan that's designed to cover the borrower's expenses until the next payday. Sometimes, this type of loan is also referred to as cash advances. (Cash advances can also be taken against an existing line of credit like a credit card.)
Payday loans don't fall under as strict legislation like conventional secured loans (homes, cars) and unsecured loans. It is common to have a payday loan have an APR of over 50%. Therefore, it is imperative that the individual who takes out the payday loan pays it back as soon as possible to avoid extreme interest charges.
|Paycheck garnishments are never fun.|