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Before describing the benefits of a payday loan, the reader may well be wondering what exactly one is. Though it is fairly intuitive that it has something to do with working and something to do with lending, it may not be entirely obvious what a payday loan actually is. In essence, a payday loan is some amount of money lent for a short period of time, generally until the borrower's payday. The term is often used interchangeably with cash advance (which can be considered ambiguous as a cash advance could also refer to an advance on a credit card line). These loans are often regulated by the government to ensure some degree of fairness in their distribution and lending, such as by placing restrictions on the amount of usury that can be collected through them.

The immediate intuitive benefit of such loans is fairly obvious. Somebody has a significant bill that needs to be paid in a short amount of time, as a result of neglect or due to some other unforeseeable circumstance. Having few others to turn to without hesitation, the individual will then try to secure a payday loan on the merit of a job they hold and the guarantee that they will pay the loan off by the time their paycheck comes around. It's basically having the money you've worked for, minus interest, before you would generally get that money from your employer.

Such loans aren't without criticism, however. Lenders typically set comparatively high interest rates while the people that generally are in need of payday loans are individuals unable to secure a line of credit with lower interest rates elsewhere. In spite of controversy surrounding this issue, the business model is a thriving one that demonstrates that the people who use these services consider the need/benefit as outweighing the negatives.