A payday loan is a short-term loan, often for just a few hundred dollars, that a people can take out to cover an unexpected expense. The loan is actually a cash advance of your next paycheck, for a fee, so naturally, you must have a steady job to take out this type of loan payday. The amount of the cash advance, plus the fees, is take out of your next paycheck.
Obviously, a loan payday is only meat for unexpected expenses that cannot wait until your next paycheck is due. It could be used to avoid bounced check fees or other late fees. People need evaluate the costs of borrowing money this way to see if it is actually worth it to them.
A payday loan should be rarely used, it is not a solution to not having enough money to cover normal expenses. These loans can usually be extended but this is not a good idea as the interest rates are very high. The interest rates are high for two reasons. First, these are short term loans, usually for only a week or two. Second, the lenders are extending credit to people with bad credit or no credit. You’re paying high rates because the lenders are taking a risk lending you money. When used for emergencies, these loans are helpful but when people abuse them, they end up costing a great deal of money.