Under the American Recovery and Reinvestment Act of 2009, taxpayers were granted relief of $400 per person in tax credits and $800 per couple. Rather than receiving a check for this amount, taxpayers would see the relief in the amount taken home each payday. Purportedly, this would reduce the need for payday loans.

However, there has been an increase in people using payday loans, perhaps because of the economic situation. Payday loan lenders report that only 2% of their clients use a payday loan only once. Most people return to a payday loan as a source of emergency cash again and again when they fall short.

Internet payday loans can cost up to $30 for every $100 borrowed. Some sites allow for a no penalty payback fee if the loan is paid back before a certain time, yet if the loan is not paid back, the fee is reapplied to the loan. Many lenders automatically renew the loan by withdrawing the fee from the borrower’s account.

Typically, a payday loan ranges from $200 to $2,500 and is made only to people who are over eighteen and who are employed or have a regular source of income. These types of loans are generally unsecured and poor credit is usually not a problem. To apply for an online payday loan, most online lenders make the application process simple, using either an online form or a toll-free number to call. The loan amount is then deposited in your account within the next few days.

Payday loans are not for everyone and are only recommended in the case of extreme emergency. Some payday loans can be worth it, however, if you will be avoiding paying late fees or other expenses by having cash on hand. Talking to a financial counselor prior to getting a payday loan is advisable.