Pay day loans are an option to get cash for people that have difficulty in getting approved for other types of personal loans. They provide the allure of fast cash with minimal questioned asked. However, they can be accompanied by relatively high loan fees and interest charges, so it is advised to repay these types of loans as quickly as possible.

Pay Day Loans - Easy Application

Pay day loan lenders make it very easy to apply for a loan. Loan applications are pretty short, with limited verification procedures. This ease of application makes these types of loans very appealing to someone in need of cash. A lender wants to make sure that you have a job, so you have the means to repay the loan.

Pay Day Loans Offer Fast Cash

When you apply for a pay day cash advance, you can receive money anywhere from 2 to 24 hours, which is another reason for their popularity. If you apply in person, you don't have to wait long to have cash in hand. If you apply for a pay day loan online, the lender can have the funds transferred into your checking account.

Payday Loan Repayment Terms

A payday loan is designed to last for a pay period. When you apply for the loan, you will give the lender a signed, post-dated check. You are expected to repay the loan by your next pay period. If you don't make a payment, the lender can cash the check you provided when you applied for the loan. If your checking account does not have enough money in it to cover the check, the lender can charge you for overdraft fees, or provide a loan extension to provide extra time for repayment.

Payday Loan Fees

Due to the high default rate, lenders charge relatively high fees on payday loans. Lenders are required to disclose the costs of the loan in terms of an Annual Percentage Rate (APR). Since the loan term is extremely short, and the loan fee is high (when considered as a percentage of the loan amount), the APR on these loans is extremely high. A borrower than decides to utilize loan extensions can expect to pay even more in the way of loan costs.

Given the high APR nature of these loans, and the risk of getting into a perpetual debt-cycle, payday loans are not viewed favorably in many areas, to the point where they are not even allowed. If pay day loans are allowed in your area, you should only utilize them if you have exhausted all other forms of financing, and are able to repay the loan within one pay period.