Payday loan or paycheck advance refers to a short-term loan which is taken to cover the expenses of a borrower until his/her next payday. Such loans are sometimes also known as cash advance. Legislation in regard to such loans tends to vary widely between the different nations and, within US, between the different states. Some jurisdictions have limited the APR, which any lender may charge. This is done to prevent them from charging unreasonable or excessive rate of interest. There are also a few jurisdictions which outlaw payday loans entirely, while some have little restrictions on the payday lenders.

Payday loan is legal as well as regulated in thirty seven states in the United States. In thirteen states it isn't either feasible or illegal, given state laws. When not banned explicitly, laws which prohibit payday loan are generally applied as usury limits, i.e. hard interest rates caps that are strictly calculated by APR.

Payday loans feature considerable risk for the lender. With around ten to twenty percent default rate, defaults tend to cost lenders almost one fourth of their total annual revenue. It is due to this reason that interest rates for such loans are usually higher that other types of loans.

With high interest rates, such loans might not appear to be the most appealing loan option. Moreover, if a borrower fails to pay his or her repayment on the due date, then the outstanding balance would be subject to late fees and other penalties. However, a person may find him/herself in such financial turmoil that such a loan may stand up as the only option available. There are many people who literally survive on such loans. Most of them settle for such loans only because they are not able to avail any other type of loan for fulfilling their requirements.

Payday loan must be considered only in times of acute financial emergency. Make sure that you make yourself aware of the terms & conditions in regard to the loan properly before you sign on any agreement. Lenders would pursue every legal course available in case the check gets returned due to insufficient funds. Also make sure that you do not borrow more than what you actually need. This would also be of great help in avoiding heavy debts in future. Make sure that you borrow only that amount, which you could pay when you receive your next pay check.

In any case, payday loans are short term loans; and hence should be treated accordingly. Make sure that you pay back all such loans, as soon as possible. If you are searching for the best payday loan, then you may also visit http://loanshack.com. Here you can get a lot many options to choose from. What's more, you get Online Cash Advance as well.