Many Iowans, including elderly Iowans, are relying on «Payday» loans to help make ends meet. (Sometimes these loans are called «Cash Advance Loans», «Check Advance Loans»or «Delayed Deposit Checks») Lenders make these loans to people who need cash before payday (or social security deposit day) to pay rent, buy food or meet some other need. Unfortunately, many Iowans are not aware of the cost of a Payday loan. As one person put it, «It can be like working 5 days, but only getting paid for 4!»
In a Payday loan, the lender gives you cash. In exchange, you give the lender a personal check or permission to automatically withdraw money from your bank account. The lender gets to cash your check or withdraw funds from your bank at some future date, usually your next payday.
The problem with Payday loans is their high cost. The cash you receive from the lender is usually a lot less than the amount of the check or the withdrawal.