A "payday loan" or more appropriately called a "post-dated check loan" is a short-term loan offering a small loan amount at a high-interest rate to borrowers to meet their expenses until the next payday. It is also termed as "Costly Cash" by the Federal Trade Commission. It is also known as "Pay check advances" or "Cash advances" A payday loan is a convenient and fast way for the potential borrowers to fulfill their emergency cash needs.

The payday loans have a number of advantages which can be listed as-

It does not involve cycles of approvals to avail of the loan facility.

The payday loan is instantly approved by the lender, provided the borrower submits the necessary documents that concern the employment proof of the applicant borrower.

Applying for the loan is convenient for the borrower.

With over a number of outlets offering payday loan services covering all the major states in USA, a retail lender has come within the reach of an interested borrower and the internet-lending is just a click away.

Quick Cash.

The borrower need not follow a cumbersome manual procedure to procure the loan amount, as is followed to get the other types of loans sanctioned. The loan amount is credited to the borrower's account within a few of the payday loan being approved.

It's Affordable.

The payday loan option is relatively affordable for those who earn a consistently healthy income and it is within their capacity to repay the loan until the next pay day.

Discreet Transactions.

Payday loans need the involvement of just the borrower and the lender. No third party can interfere during the entire process.

Secure Transactions.

Since the loan proceedings are directly credited to the borrower's account after a thorough background check of the borrower as well as the lender, there is no possibility of the transactions being handled by impersonators.

The law defines different rules and regulations to conduct payday loan transactions for every individual state. In USA, payday lending is legalized and carried out in 37 states. However, it is not permitted in Georgia and 12 other states owing to the state law. The usury law does not allow the interest rates that are charged on the principle payday loan amount to exceed a certain APR (Annual Percentage Rate). The Usury law states that the interest rates should be inclusive of all loan fees, i.e. the interest charged on the loan amount and the other additional charges. The state law forbids the charging of any additional fees other than the regulated fees.

Some state laws do not allow a lender to sanction a loan to borrowers who already owe a debt. Systems located in the states of Florida, Michigan, Illinois, Indiana, North Dakota, New Mexico, Oklahoma and Virginia conduct the checks to ensure that loans are being granted only to the eligible customers. It is possible for a borrower to evade these regulations by borrowing from multiple lenders, if it is legal as per the state law.