Payday loans, often called short term loans or deferred deposit cash loans. Payday loans are frequent pitfall for the customers, still people go for it. Handling online payday loan service, have no doubt proved to be quite difficult, and may also enroll a common man in the cycle of debt. While availing a payday loan, the lender goes to the borrower directly or accesses him electronically over the internet and asks for the loan. The borrower calls the lender at the payday loan store and manually hand over the loan to him. Paper work may or may not be involved while availing, this varies from lender to lender whether he relies upon the borrower or not. While applying for the loan electronically, the borrower asks the lender to deposit the money in his account through credit card or by any other electronic means and in no time the money is in the borrower’s account. He may be asked to fill a form and a document with the loan undertaking statement. But this is not always the case. The payday loan lender sometimes gives the loan, directly depending upon the goodwill of the borrower. The borrower can utilize the funds in whatever manner he wants. On the date of payment of the loan, the borrower has to go to the lender’s store and give the payment back along with the interest, through a post dated check. Since the rate of interest is so high and the term of loan is no short, there is no wonder that a very high percentage of loans are enrolled over by the borrower time and again, so that the accumulated fees is equal to an effective annualized interest rate. Here again the borrower is at the threshold of the lender. As much as these loans are simple to avail, more is the difficulty in paying back the payday loan, so they must be avoided at the best.