Payday Loan

For a payday loan, the borrower writes a postdated check to a lender, and the lender gives the borrower an amount equal to some fraction of the face value of the postdated check. Depending on state regulations, payday lenders will take somewhere between 15 and 25 percent of the face value of the check as a fee and will provide the borrower the rest of the face value in cash on the day the check is written. At the end of the usual 2-week period of such loans, the borrower can redeem his or her check with a cash payment equal to the face value of the original postdated check or can permit the lender to present the check for deposit on the day the ...