The actuality is always that most of these borrowers cannot repay on time and they also are forced to pay the eye and take out another loan to hide the principle. And they pay dearly for this. The average borrower in South Carolina takes 10-15 loans to payoff their original loan amount.
Most of the borrower rights out a check mark for the quantity of the loan along with a fee (not post dated as that is illegal). This fee ranges from 10% to 40% of the loan and the borrower normally has two weeks to pay it off in full. Most can't pay it off in time and end up owing, now and again, more in fees than the amount of the main loan.
Most states have usury laws which limit an annual rate to 30% or under on most loans. Currently Payday stores slip by by proclaiming that loans are repaid in 2 weeks so no violation has occurred and they are providing a much needed service to moat people that have no where else to go.