If you are wondering exactly what a payday loan is maybe this will help you.

A payday loan is a small, short term loan that is used to help cover the borrower’s expenses until he or she gets paid again. These loans carry a lot of risk to the lender. They have a ten to twenty percent default rate and defaults cost lenders around a quarter of their annual revenue. The loan process is simple. The lender gives a short term unsecured loan to the borrower and then the borrower pays back the loan on his or her next pay day. Usually the borrower shows a pay check stub to show that he or she is working. The borrower writes a postdated check to the store and then when the date arrives that it should be paid if the borrower hasn’t come back to the store to pay the loan in person then the lender can cash the check.