The following is a direct copy from the CFPB
While there is no set definition of a payday loan, it is usually a short-term, high cost loan, generally for $500 or less, that is typically due on your next payday. Depending on your state law, payday loans may be available through storefront payday lenders or online.
Some common features of a payday loan:
Other loan features can vary. For example, payday loans are often structured to be paid off in one lump-sum payment. Some state laws permit lenders to “rollover” or “renew” a loan when it becomes due so that the consumer pays only the fees due and the lender extends the due date of the loan. In some cases, payday loans may be structured so that they are repayable in installments over a longer period of time.
Many state laws set a maximum amount for payday loan fees ranging from $10 to $30 for every $100 borrowed. A typical two-week payday loan with a $15 per $100 fee equates to an annual percentage rate (APR) of almost 400 percent. By comparison, APRs on credit cards can range from about 12 percent to about 30 percent. In many states that permit payday lending, the cost of the loan, fees, and the maximum loan amount are capped.
Some states do not have payday lending because these loans are not permitted by the state’s law or because payday lenders have decided not do to business at the interest rate and fees permitted in those states. In states that do permit or regulate payday lending, you may be able to find more information from your state regulator or state attorney general .
There are special protections through the federal Military Lending Act (MLA) for active duty servicemembers and their dependents. Those protections include a cap of 36 percent on the Military Annual Percentage Rate (MAPR) as well as other limitations on what lenders can charge for payday and other consumer loans. Contact your local Judge Advocate General’s (JAG) office to learn more about lending restrictions. You can use the JAG Legal Assistance Office locator to find help.