Payday loans and cash advances are small loans, usually under $1,000, taken out for a very short period of time, and is payable in full by the consumer’s next payday. Since the loan is for such a short period of time, the rates can be higher than a traditional loan written by a bank or other financial institution. However, a cash advance can be a much better alternative to bounced check or late fees, and come in handy in an unexpected financial emergency.

Let’s say, for example, that your exhaust fell off of your car, and you won’t have any extra cash until your next paycheck, which is a week from Friday. You need your car to get to work so that you can make money to pay for your car, and you don’t want to lose your job due to an inability to get there. This is the perfect scenario for a cash advance.

Your qualifying loan amount for a cash advance differs significantly from a traditional lending institution, as your credit report and score do not influence this decision. Instead, the payday loan industry utilizes your paycheck, with higher loans usually granted to those that have their paycheck directly deposited into their checking or saving account.

Under the District of Columbia Payday Loan Consumer Protection Act of 2007 (effective November 24, 2007), high-interest loans based on the holding of a check are no longer authorized. Personal loans are subject to the usury cap in the District of Columbia which is 24% (as of May 2008). Companies that offer payday loans to District of Columbia residents are subject to these laws.

* Cash-Advance-USA.org provides information and research on cash advances/payday loans. We are not a payday lender or broker, nor are we necessarily affiliated with the companies profiled on this site. Not all products and services are available in each state.