Payday-style loans (or high-cost, short-term credit) are short-term financing for lower amounts of cash. These loans can be accessed quickly, also by individuals with bad credit or reduced incomes. The tradeoff would be that they often come at a cost that is high. While 4 in 5 of the loans are often paid in a single month or less, it works out to be 1,300% annualised if we look at the typical interest rates charged. Prices vary by payday loan provider, but weighed against other credit choices, this is certainly an costly method to borrow.
Take a good look at the diagram below which illustrates the various forms of signature loans and where loans that are payday in: