They are popular for a number of reasons such as:

· Credit checks are not required. The personal check that you make payable to the lender acts as security.

· Approval is quick. If all the necessary documents are submitted, your loan application maybe approved in minutes.

· The paperwork involved is simple. Generally one or two documents would suffice which explains the loan process and your obligations.

· The repayment process is without hassles. The check submitted as security is encashed on the next payday by the lender. You could extend the loan to subsequent paydays for a fee. However this is very expensive.

· Easy availability. Payday loans are particularly appropriate for emergency situations provided the amount required is small and one is willing to bear the high cost of the loan. Drawbacks of payday loans:

· Such loans are prohibitively expensive. Lender fees can range from $15 to $25 per $100 borrowed. These fees are for a period of 14 days.

· Many borrowers, within a short time, find themselves in a debt trap. With each extension of the loan, the fees in total increase such that at the end of two, three or four extensions they equal the loan amount.

· Collection of outstanding loans is harsh. Considering the fact that this business is a high risk lending game, lenders wield the stick harshly on the slightest default.
About the Author

John Williams is the payday loans specialist at http://www.paydayer.com Click on over today to see the top offers on the web right now for payday loans.