Advertisements for payday loans exist everywhere; on store signs, in newspapers, on billboards, and especially on the Internet. Some payday loan companies advertise by direct mail, so you probably see ads arriving in your own mailbox, too.

Sometimes they're called cash advances, payday advances, check loans, or even post-dated check loans, but all of those terms mean essentially the same thing.

While you've seen the ads, you may not know what payday loans are, how they work, or how to go about obtaining one. A payday loan is a short-term loan, generally for 14-30 days, that is paid back by writing a post-dated check, or agreeing to an electronic withdrawal, to be deducted from the borrower's bank account on their next payday.

Borrowers may be eligible for loans of anywhere from $100 to $1,000, depending on the lender's policies and the borrower's income. Just like every other type of loan, there are advantages and disadvantages to this type of borrowing.

On the plus side, payday loans are easy to apply for, and easy to get. Borrowers are asked to fill out a short application form that includes where they work, their home address and telephone number and monthly income.

Applicants also provide information about their bank account, including the name of their bank and their account number. In general, the application is much simpler than those required by traditional banks, and less verification is required.

Borrowers are asked to provide a recent paystub, their latest bank statement, and a copy of their driver's license. There is no credit check involved, which shortens the time frame considerably.

The entire process takes just a few minutes, instead of days or weeks, and can be approved on the spot, resulting in the borrower receiving a cash loan in approximately half an hour. Once approved, the borrower writes a post-dated check for the date of their next payday, and for the amount borrowed, plus the lender's fees.

Getting a payday loan from an Internet lender is even quicker and simpler. Borrowers provide their bank account number and the loan money is direct deposited into the borrower's account, oftentimes within a matter of hours.

Repayment is made the same way, by direct withdrawal from the borrower's bank account, for the amount and on the date specified in the loan agreement. Repayment arrangements vary and some companies give the borrower an option to roll the loan over by paying an additional loan fee.

The borrower, therefore, has the option of paying off the entire loan on the original date agreed, or of paying additional fees to extend all or part of the actual loan to a later date.

The other major advantages to getting a payday loan are that there is no collateral required and no credit checks involved. Payday loans are available to people who are working, whether or not they have good credit or are current with all their monthly obligations.

The borrower can find the particular loan that best fits their needs, without ever leaving the comfort of their own home. Is there a downside?

Of course, as with any type of borrowing and lending, there are disadvantages to payday loans. For example, they cost more than traditional loans because lenders are allowed to charge higher loan fees or finance charges, for short-term, unsecured loans.

Most payday loan companies offer flat fees that are based on the amount borrowed and the amount of time until it is paid back in full. If the loan were rolled over three times it would cost an extra $15 each time, in addition to the original $15.

In that case, the original $100 loan could cost the borrower as much as $60. So be sure to have the money to pay the loan back when you agreed to in your contract.