A payday loan (sometimes called a cash advance) is a short-term
loan that a borrower takes out to cover immediate expenses and then
repays to the lender when his
or her next wage or salary payment is received.
In the UK, typical payday loans range from £75 to £1,000 and are available from a variety of loan providers, usually for a two week period, in most cases charged at a high rate of interest.
If you have problems budgeting or sometimes spend more than you earn, a payday loan might appear to be a tempting way to get yourself out of a tight corner. If you have rent or mortgage arrears or overdue utility bills to pay, you might need to take drastic action to keep important creditors at bay.

By their very nature as a type of short-term loan, decisions about approving payday loans need to be made speedily. As a general rule, payday loan providers do not run credit checks on their customers. This allows them to make decisions more quickly about whether to approve cash advances to individuals. The perceived increased risk to the lender is compensated for by the relatively short term of the payday loan and the higher rates of interest charged.
In recent times, a number of companies have entered the payday loan marketplace, so it pays to shop around when looking for a payday loan. In particular, check the Annual Percentage Rate (APR) of the payday loan on offer. Just like other types of loans, the APR can vary significantly between providers. The terms and conditions of the loan, particularly regarding repayments, should be scrutinised carefully.