Here's how a payday loan works. Payday loans are a type of cash advance secured on your future paycheck. You or a borrower asks for a loan for up to four weeks and provides the required documentation, often only proof of employment and identification. There are no credit checks and generally you will not be required to fax any documentation.

You may be wondering what the interest is and what it will cost you, your payday loan interest rate represents how much the loan is going to cost you. The APR is all the costs of the loan (including fees and the payday loan interest rates) charged by the lender for the length of the loan. Payday loan interest rates often lead to a high APR because they are, well, short term. Typically finance charges are calculated on the basis of $15 per $100 borrowed for each 14 day period, which is equivalent to an APR of 391.07%.

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