Cash advance loans sound great, in theory. The principal behind these loans is to advance consumers anywhere from $200 - $1,000 to get through a “financial rough patch”, until his next payday. Know the insider secrets about cash advance loans before you sign on the dotted line.

Interest rate

The interest rate attached to payday or cash advance loans is an astronomical 200 percent or more APR (annual percentage rate). Essentially, a consumer borrowing $200 will end up paying back $225 or $250 several weeks later, due to the interest rate. It may not seem like a lot of money at the time, but the problem is that many consumers become chronically dependent on these loans, payday after payday. In fact, some people admit to taking out a new payday loan to pay off an existing payday loan, resulting $650 - $1,300 or more, in annual interest charges –based on a bi-weekly payment example.