What Is a Payday Loan? When you hear this term, it’s to describe a high-interest small loan that you simply must pay off on your next payday – typically in fortnight . The problem with these short-term cash advances is that few borrowers can come up with the whole repayment balance that quickly. Once you fail to repay the money on time, the lender starts hitting you with high interest penalty fees. These payments keep you losing money but they are doing nothing to scale back the quantity of your debt.