This is so wrong. A payday loan is due on your next payday, no matter what. This loan flexes the term based on ability to pay. The better analogy would be a fi

This is so wrong. A payday loan is due on your next payday, no matter what. This loan flexes the term based on ability to pay. The better analogy would be a fixed-cost loan with variable installments based on your income- a much, much friendlier loan structure for consumers. What makes payday loans unaffordable is their structure, more than their cost. In California, a typical payday loan goes like this: 1- You write me a $300 check and date it for two weeks from now (when you get paid) 2- I give you $250 in cash 3- Two weeks later, I cash the check If you had to borrow $250, what are the chances that you have $300 left over on your next paycheck? Zero. So really, it's: 3^- You come back to the store and say "don't cash that check, I'll get hit with a $25 overdraft fee." 4- I say "ok, give me $50 and I'll move your due date back 2 weeks." 5- You say "phew, thank goodness!" 6- Two weeks later, goto 3* So the one-time payment is what makes it horrible. Even if they charged 0% APR and all you had due was $250, you'd still be hosed. An installment loan, though, where you pay $50 every two weeks for N months is clearly better, as proven by step 4 here.