Pay day advance Loans, additionally called emergency loans or a Cash Advances, are small-scale short-term Personal Loans meant to be paid back with a customer's future paycheck. The number of Cash Advance loans obtained by Americans has risen every year since 2006. In 2011, all but 13 states allow this kind of Loan, making the practice authorized and/or controlled in 37 states.

Payday cash advances are intended for U.S. residents that are at least 18 years of age, and who are currently employed. The consumer can fill out an application for a Payday Loan (in person, at a store front, or online) to request a fast loan; typically as much as $1500. The customer then gives the loan originator a check for the sum of money s/he desires to receive, as well as finance fees (subject to how much is borrowed). The lender agrees not to cash the funds before the loan is due; this period can range from 7 days to 1 month, however, most will be in a 7-10 day range.

Payday loan amounts usually range from $50 to $1500, with the normal loan size falling somewhere between $300 to $400. Additionally, interest charges on payday loans often range between 10% and 20% of the amount of the loan. This seems to be similar to a Credit Card, but remember that a credit card's interest is spread over a full year. Hence the real monthly finance charges on your credit card account balances are closer to 1-2%. With payday loans, you are talking about 10-20% for each short-term loan. This could really add up, especially if you don’t repay the loan right away.

So, let's say you are interested in a payday loan and want to know what to expect. First, you must determine whether you are eligible for a payday loan (are you a U.S. resident that's 18 or older, and is currently employed?). Next, you must see how much to borrow (this is often based on your monetary requirements, along with your fiscal resources). Let's say you choose to request a short-term loan for $500. You'd write a personal check to the lender for the $500, plus interest and fees (making the check close to $600). The lender offers you the $500 in cash, and pledges not to cash your check for about a week. If, at the conclusion of the loan duration you've got sufficient funds, the lender will deposit your check and you're finished with your cash advance. However, if you have insufficient money to repay the loan, you have two options: (1) Just pay the financing fees (and any charges that have accumulated throughout the 10-day period), and compose yet another check for an additional easy cash loan; or (2) Get the money to repay the payday loan from another source.

Unquestionably, consumers can get themselves in a lot of trouble using payday loans, especially if they are unable to afford to repay the initial loan. Merely paying down the interest rate and fees, without paying down the principle balance of a payday loan can plunge someone into a lot of debt quickly. But there are ways to utilize emergency loans like payday loans responsibly. First, it's crucial to borrow only as much as you know you can repay in 7-14 days. If you’re not sure you’ll have the money to repay the loan when it’s due, do not opt for a payday loan. Second, prior to borrowing, it's important to know the complete amount of interest and charges that might be imposed, so you may accurate calculate the entire loan amount, BEFORE applying for one.