A Payday Loan is also known as a 'instant cash loan' or 'cash advance', is intended to be a short-term loan intended to help handle a borrower's financial needs until they receive their next paycheck. A Payday cash loan is typically offered in amounts of between $100 and $500 and are generally meant to be repaid with your next paycheck, usually within two weeks along with an interest fee. An average, two-week loan fee is around $20 for each $100 that you were advanced. In a fairly typical example, a person who is accepted for a payday advance loan will write a post-dated check for the full amount agreed upon. The payday loan company will hold the check until the due date.

It is important to state upfront, that when taking out a payday loan, you are able to pay it back in full by the original due date. Failure to do this at the agreed upon time can lead to a scenario where the amount of money to be paid back can become beyond your means. In one scenario, when the due date arrives, the borrower has the option to redeem the check by paying $345 in cash, or 'flipping or rolling over the loan' by paying off the $345 and then immediately getting another loan for $300, in effect extending the original loan for another two weeks. In many states, 'rolling over' the loan is not permitted by law. In those states the borrower can choose to opt into a payment plan.

While we can agree that some payday loan companies interest and payback rates can become quite high, for those who are in need of quick money and can pay the loan back on time, it can be a real lifesaver.

In person, one brings the necessary documents to apply for a payday loan. On the internet, online payday loans are marketed through e-mail, online searches, paid advertising and referrals. A potential customer fills out an online application form or faxes over a form that requests your personal information, such as a bank account number, Social Security number and employment information, such as recent copies of your employment check.

When the loan is approved, generally within 24 hours, it is direct-deposited into the customers checking account and the customer agrees that the loan re-payment will be electronically withdrawn on the next payday.

One should never be ashamed if you find yourself in a jam and are in need of some quick cash, but especially when using payday loan companies, please borrow responsibly.