In reality, there is none. All of these terms describe the same thing. They are interchangeable names for a short-term (generally about 2 weeks) cash advance. Typically, money is borrowed until the next payday and then paid back with fees. If the borrower cannot pay the money back when payment is due, the loan period can be extended which usually allows the next payday to occur before payment is due. Additional fees apply for extensions of payment. Typically, providers will grant 3 to 4 payment extensions. If done via the Internet, the amount borrowed plus fees can be debited from the borrowers checking account.

How much money can be borrowed?

An applicant can request as little as $100 and as a returning customer may qualify for as much as $1,500 in payday loans depending on the provider.

Fees

Average fees are about $20.00 per $100.00 borrowed for a period of 2 weeks.

Requirements

Most lenders require the applicant for a payday loan to have a verifiable source of regular income that has been providing between $1.000 and $1.200 after taxes per month for at least 3 to 6 months, some require that the applicant be employed full time. Minimum age to be eligible for a payday loan is 18 with most providers. Most agencies will not grant loans to applicants that have outstanding applications with other payday loan providers or will decline applicants that have outstanding applications with more than one other agency. The applicant needs to have a current checking account that has been open and active for about 90 days.

If applying for a payday loan over the Internet, access to a fax machine is required by most payday loan providers to submit the application and verification items which usually include a bank statement and a copy of a voided personal check. However, there are companies that offer so called fax free loans, which are approved without verification items on the condition that all information given in the application can be verified, e. g. via the telephone.