A payday loan is a short-term loan, usually $500 or less, that borrowers are expected to pay before their next payday. Payday loans are an option to fund unexpected purchases that arise before the end of the month.
When applying for a payday loan, borrowers must provide access to their accounts or write a check in advance. The loan plus the interest will be deducted from the borrower's balance on the borrower's payday. A payday loan can be structured to be paid in one full payment or by installments. The cost of the loan may vary from one lender to another.