Payday Loan
Also called: payday lending, cash advance loan
A payday loan is a small, very short-term advance repaid on your next payday, typically costing $15 per $100 borrowed — which annualises to roughly 400% APR. The business model depends on rollovers: most borrowers cannot repay in full in two weeks, so they refinance repeatedly and pay multiples of the original loan in fees. Several jurisdictions cap the rate or ban the product outright, and the standard alternatives are a credit-union small-dollar loan or an employer advance.