Payroll Advance    

If bad credit history or bankruptcy is preventing you from securing a bank loan, a payroll advance can be a temporary solution. A payroll advance is a short term loan (fewer than 35 days) with a high interest rate. Payroll advance loans are secured against your income rather than your assets, and the limit is based on your average wages.

There are times when a payroll advance is the best solution to a short-term cash flow problem, but you should exercise caution. For instance, payroll advances can help you cover the costs of emergency home or car repairs, medical or vet bills, and overdue utility payments. Purchases like furniture or vacations typically don't merit the high interest rates that these loans charge.

Understanding Interest on Payroll Advances
Most such lenders require that you show proof of your income by providing recent pay stubs. You may have to prove that your net monthly income exceeds $1,000 (or a similar amount) and that you've had a bank account for a minimum period of time. Many payroll advance lenders will also require that you allow them to withdraw their money automatically from your account on your next payday.

The cash limits on a payroll advance actually work in your favor. Because of the high APR on cash advances, you need to pay them back quickly, usually with funds from your next paycheck. The APR is likely to be in the neighborhood of 1,000 percent. If you borrow $100, you'd owe about $114 after one week; after a month, you'd owe about $170. In a month an a half, you'd owe more than double the original amount! Use common sense when you take a payroll advance, and you should come out unscathed.