Payday Loans Law and Legal Definition

Payday loans are small short-term loans advanced to cover a borrower's expenses until the next payday. Through payday loans, small amounts are advanced for a higher rate of interest. For availing a payoff loan, a customer gives a post dated check and pays a fee for the service. The lender holds the check and advances cash on the next pay day. Payday loans are also known as check advance loans or cash advance loans. Usually, persons having bad credit and low income are drawn to payday loans.