Payday loans are made at very high interest rates for very short terms. The Center for Responsible Lending defines payday loans this way: “Banks make payday loans by depositing money into a customer’s checking account. The bank then automatically repays itself in full by deducting the loan amount, plus fees, from the account when the customer’s next direct deposit paycheck or other benefits income comes into the account. The average annual percentage rate (APR) based on a typical loan term of 10 days is 365% APR.” More information on payday loans, including how they can be harmful to consumers. is available on the Center’s website.