A payday loan, sometimes called cash advances, are short-term loans for a small amount, anywhere from $200 to $2,500. In general, $500 is the typical loan amount. Cash advances are designed to help people get by until their next paycheck. A typical payday loan is about two weeks, but it may differ depending on the provider of the loan. Cash advances should only be used as for short term financial needs and not as a long term solution.

If you find yourself in a situation where you are considering a cash advance, shop around at different places for a good interest rate. The Internet is a great tool for doing this. Many payday lending stores even allow people to directly apply for a loan online through their website.

This is how a cash advance works: you either give the payday lending store your bank account information or write them a postdated check for the amount of the loan plus interest. When the loan matures, you are expected to return to the store to repay. If not, the store will simply electronically deduct the amount from your bank account or cash the check.

Lately a lot of state legislations have been cracking down on predatory lending practices concerning these types of loans, and many states have placed a cap on the interest rate that cash advance loans can have. Nevertheless, the interest rates plus fees for a cash advance loan can amount to as much as 700%, so be sure that you know what you are doing when you take out a cash advance loan.

Do all that you can to make sure that you will have the necessary funds to repay the loan plus interest when it is time. Most payday lenders give a stipulation if customers can’t pay the loan on its due date. For a per-day fee, they can extend the time frame of the loan. This may be a temporary solution, but not a very feasible long-term solution, as the customer only gets deeper and deeper in debt by paying the daily fee to extend the life of the loan.