PAYDAY LOANS: (which are also known as cash advances, check advances, or paycheck loans) are a short-term financial product, which are normally due on the borrower's next pay day. The typical payday loan is for an amount of approximately $200.00 to $300.00 and has a term of about fourteen days.
According the Federal Trade Commission: "Borrowers write personal checks payable to the lender for the amount they wish to borrow plus a fee. The company gives the borrower the amount of the check minus the fee. Fees charged for payday loans are usually a percentage of the face value of the check or a fee charged per amount borrowed (for example, every $50 or $100 loaned). If one extends or refinances the loan (for exmaple, another two weeks) the person will pay the fees for each extension."
The FTC provides additional information about payday loans on its website.
A cash advance is a small, unsecured personal loan, which normally has a term of two or three weeks. The borrower receives the cash he or she needs in advance of the following pay check. The cash advance then matures on the person's next pay day.
Pay day loans are another term used to describe an emergency financial loan product. They are sometimes obtained from a local retail location; and they are also available online.
