Payday loans can be dangerous forms of credit. Interest rates are astronomically high (according to an FDIC advisory, between 300 and 1000 percent when calculated annually), a significant number of payday loan customers take out multiple loans per year, and itâ€™s difficult to determine a legitimate company from a fly-by-night business front. Many customers get trapped in a never ending cycle. By the time the loan comes due on the next payday (along with an additional $1.50 to $2 for every $10 borrowed), the customer canâ€™t afford to repay the loan and pay his current bills. He then takes out another payday loan for just a bit more. When one loan company stops extending credit, the customer moves to the next, borrowing to pay off the first. Nothing about this sounds good or appealing, right?