Cheque cashers, finance companies and other businesses may offer you small, short-term, high-rate lending known as a cash advance loan. (Also called a check advance, post-dated check, or deferred deposit check, or payday loan.)

Usually, a borrower writes a personal cheque payable to the lender for the amount he or she wishes to borrow plus a fee. The company gives the borrower the amount of the cheque minus the fee. Fees charged are usually a percentage of the face value of the cheque or a fee charged per amount borrowed ? say, for every $50 or $100 loaned. And, if you extend or “roll-over” the cash advance loan ? say for another two weeks ? you will pay the fees for each extension.

Under the Truth in Lending Act, the cost of a cash advance loan ? like other types of credit ? must be disclosed. Among other information, you must receive, in writing, the finance charge (a dollar amount) and the annual percentage rate or APR (the cost of credit on a yearly basis).