Payday loans are available at a wide variety of retail outlets.  You can find these stores in strip malls across American, usually the operation specializes in check cashing for a fee, as well.

Payday loans feature a small cash loan that is due upon the applicant’s next payday.  This is generally accepted as a two-week duration.  In the U.S., payday loans usually run at about 15% to 30% of the amount loaned for the two-week time period.  This comes to about 390% to 780% APR.

Proof of employment via recent pay stubs and supplying copies of recent bank statements secure payday loans.  Different payday loans must meet different criteria as outline by each lender’s underwriting requirements

The borrower writes the lender a post-dated check for the borrowed amount plus the interest and leaves it with the lender in return for the cash.  When payday loans come due, the borrower is expected to return to the lender’s place of business and repay the loan in exchange for his or her check.  When borrowers do not show up to repay their payday loans, lenders either deposit the check traditionally or use it to legitimately withdraw the funds electronically.

If the check bounces, the borrower now faces check fees at their bank in addition to extra fees that can accrue on late payday loans, subject to the lender’s terms.  In some states, the lender must offer an extended payment plan.

Online payday loans are available as well.  They are advertised through emails, search engines, referrals, and paid advertising.  An online loan requires the borrower to fill out an online loan application.  The application requests the borrower provide personal information, his or her Social Security number, bank account numbers and history, pay stubs and employment information, copies of a check, and a signed agreement.  These documents are usually faxed to the lender.

Upon receiving all of the documentation and verifying its authenticity, the lenders might then approve the payday loans.  In the case of approval, the lender direct deposits the loan amount into the borrower’s bank account.  On the borrower’s next payday, the loan amount plus interest is electronically withdrawn from his or her account.

When the borrow repays the loan, he or she is usually given the option of immediately taking out another payday loan in the same or greater amount.  This is referred to as flipping the loan and is illegal in some states where the borrower must wait a certain period of time before applying for any other payday loans..  In states requiring an extended payment plan, the borrower could opt in to such a plan at this time and keep the money longer, by making an additional payment.

It is reported that most payday loans run from $100 to $2,5000.  The most popular and most marketed payday loans seem to be for $500.  Finance chargers on payday loans differ according to lender and run from $10 per $100 borrowed to $30 per $100 borrowed.  The most frequently charged rate seems to be $25 per $100 borrowed, which represents an Annual Percentage Rate of 650% over two weeks on most payday loans.