Payday loan
A small, short-term loan meant to be repaid on your next paycheck — with triple-digit effective APRs.
Why it matters
Payday loans typically carry APRs of 300–500%. They are legal in most states with varying caps. If you cannot repay on time, they roll into new fees, creating a debt trap. Almost any alternative — credit union small loan, employer advance, hardship payment plan — is cheaper.
See also
Educational only — not financial, tax, or legal advice.