Here is a typical example of how a pay day loan works:Ê the borrower requests a loan for a short period of time, usually one to four weeks.Ê They provide the lender with proof of employment and identification.Ê In exchange for cash, they leave a postdated check with the lender that includes the "payday loan fee".Ê The cost might seem low; maybe the borrower paid $115 to borrow $100 for two weeks.Ê While this may not seem like much, if you calculate the loan cost in terms of APR (annual percentage rate) that $15 explodes to 360 percent interest.

Compare several of the links here and you will can see that rates vary considerably.